Paper or virtual gift cards can be redeemed in the system through using the customer credit balance system. A customer can have a credit assigned to them whenever there is a negative amount on a ticket.
The easiest way to do this is to create an inventory item named "Gift Card". It will need to be inventoried. Creating a Gift Card Item Type is also recommended, allowing you to filter Gift Card Sales out of reporting (since this workflow records the issuing of credit as a profit loss).
First, you will need to add a Gift Card Item Type (under All Settings-->Item Types):
Then, go to Catalog and add the Gift Card item under the Gift Card Item Type:
When a customer wishes to redeem a paper or virtual gift card, create a Tradein ticket, attach them as the customer, and add the Gift Card item with the amount that was previously assigned to the gift card when another customer purchased it for them.
Add a transaction to the tradein ticket using Store Credit, and it will attach the amount entered to the customer to be used in the future.
Ticket with gift card and Store Credit transaction can now be closed:
When the customer makes a purchase, a payment can be made from the Store Credit on their customer page and it will pull from this saved amount.