Follow Add Product to add gift certificate product. When you add the product choose "Gift Certificate" for Product Type in the tab "Miscellaneous". When your customer purchased the gift certificate the system will create a gift certificate code automatically and send to your customer in the order completion email. Your customer can then send the code to anyone, who can then apply the code during checkout.

In Promotion -> GiftCertificate you can create gift certificate manually. Enter amount in Amount text box and click Add button. The system will create a gift certificate code for you. You can then send the code to your customer, who can then apply during the checkout. You could also think this as store credit since your customer can use the code and apply to his next order upon purchase.