I'm going to tell a friend that I already have something they gifted me
What is your reason for telling them this?
Well, it the thought that matters.
While honesty is usually the smart choice, you should still be aware that it can hurt someone's feelings. They may have put a lot of time and money into your gift, being ungrateful is only going to make your friendship worse.
I just feel like honesty is always the best choice.
You should do your best to make sure your friend knows that you appreciate the gift regardless. Being honest is also great, but do not skip over the fact that your friend was simply trying to do something nice for you.