Gift cards are basically gift certificates for the new millennium. There are two types of gift cards: gift cards offered by stores and restaurants, and gift cards offered by credit card networks.
Gift Cards for Stores: These days, it seems like every place – from department stores to restaurants – offers their own gift card. You purchase a gift card with a certain amount of money, and then the person you give the card to can spend it at that particular place. For example, when you buy a ten dollar Starbucks gift card and give it to your friend, that person can redeem the card for free merchandise, food, or beverages at Starbucks for as long as there is a balance on the card. There are no fees incurred by this type of gift card.
Gift cards for Credit-Card Networks: These gift cards are offered by a credit card network like Visa or American Express. These gift cards let the cardholder use the gift card anywhere that the particular credit-card network is accepted. Most network gift cards charge transaction fees and/or monthly fees, though, so be aware of that when you are purchasing this kind of gift card.