Gift certificates are a form of "replacement" currency. People often give gift certificates if they are wanting to give a thoughtful give but don't know what the recipient would like, of if they know the recipient likes a certain store but doesn't know what they own already.
Gift certificates work by having a customer purchase a piece of paper or card that has the value of the purchase price, but only valid for the store purchased at. A gift certificate often has to be signed or authenticated by a manager to protect against fraud. Many gift certificates have serial numbers and are registered in a computer database to keep track of sales and ensure authenticity.
A variant on the gift certificate is the gift card where someone purchases a card similar to a credit card that has a barcode on it. Like serial numbers on a gift certificate, the bar code on the gift card has information that is registered in a computer and has a monetary value attached to it. Gift cards automate the process of gift certificates and allow for the money to be spent faster without hassling with papers.