iTunes gift cards were originally created so people could buy music from Apple’s music store, known as the iTunes Store. These purchased songs could then be played on the buyer’s computer using the iTunes software or on his or her iPod (and eventually iPhone and iPad).
So the original purpose of an iTunes gift card was to gift music to someone. Like any other gift card, an iTunes gift card has a special sequence of numbers and letters that the recipient can use to redeem the card’s value in their own iTunes account and then purchase music using their new credit.
Along came the App Store
But then the App Store came along and iPod touch, iPhone, and iPad users were suddenly able to spend their hard-earned cash on apps and not just music. Now if someone wanted to buy music they went to the iTunes Store and if they wanted apps they went to the App Store.
Presumably, Apple didn’t want to create gift cards for both the iTunes Store and the App Store so they just stuck with the iTunes name. So with an iTunes gift card you can buy both music and apps. Actually, to make it more confusing, you can also buy movies, television shows and ringtones which are also part of the iTunes Store.
I guess Apple didn’t like an all-encompassing name like Apple Bucks so we’re stuck with iTunes gift cards for a while. Just know that you can buy all of the digital goodness I described above using a single iTunes gift card.
Apple has since updated their gift card store to include “App Store & iTunes” in the name. This change was to help clarify any confusion. (2018).*
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*Editor’s Note – This post was originally written in 2013, it has been updated in 2018 for accuracy and relevancy.