Is it permissible for my sister to take back clothes she had given in charity and give their value to the person to whom she had given the charity, knowing that the recipient had not used the clothes and accepted the money?

What your sister did by buying back her charity is considered makrooh (disliked) by the majority of scholars, due to the Prophet's (peace be upon him) saying: "The example of one who takes back his charity is like the example of a dog that returns to its vomit." However, the sale itself is valid, because the prohibition signifies dislike, not outright impermissibility. Some scholars permit it if there is no favoritism shown by the recipient to the giver.