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Gift cards were originally called scrips. According to WikiPedia.com
"Scrip is now issued in the form of gift certificates, or gift cards. The two are essentially the same, except that the cards automate the checkout and accounting processes. Cards usually have a barcode or magnetic strip, which can be processed through a standard electronic credit card machine.

Cards do not have any value until they are sold, at which time the cashier enters the amount which the customer wishes to put on the card. This amount is rarely stored on the card, but is instead noted in the store's database, crosslinked to the card ID. The major exception is in many public transport systems, and library photocopiers, where a simplified system (with no network) stores the value only on the card itself (a stored-value card). To thwart counterfeiting, the data is encrypted, though not very strongly given the relatively low amounts of money involved. The magstripe is also often placed differently than on credit cards, so they cannot be read or written with standard equipment.

Gifts cards are increasingly being offered as consumer incentives at no cost or for a substantial discount. For example, reward points given for the use of credit cards can be exchanged for a variety of gift cards and some companies will offer high value gift cards at a discount. Gift cards are readily available at a discount using online trading services.

There are websites that allow users to trade, donate, buy and sell gift cards. Sellers use these websites because the gift card is not to a store of their liking, and buyers because this provides opportunities to buy these cards for less than they are nominally worth at the busines"

Gift Card Facts

The average company spending on internal incentive programs increased to $268,662 in 2005. The average company spending on consumer incentive programs increased to $862,222.
—Source : Promo Magazine, September 2005

55% of gift cards that are given as incentives are less than $50 in value ; 20% are greater than $100 in value.
—Source : ValueLink, July 2004

In 2004, 22% of all gift cards were purchased as a result of an incentive of some kind.
—Adult Gift Card Study, 2005, Stored Value Systems

Talk in the market is that some of the more established gift card suppliers are beginning to see a slowdown in their rapid growth experienced over the last few years. So many businesses now use gift cards for so many applications, and the number of options has grown so significantly, that these suppliers could be facing a period of slower growth and greater competition. The big advantage goes not only to suppliers with desirable products, but also with good margins to offer the various marketing services agencies that sell these programs to end-users.
—Source : Motivation Strategies Newsletter, January 2006-03-14