The determination has to do with the way the purchase is processed by the merchant, and also by the way the issuer interprets it.
Language regarding the definition of "cash advance" is (perhaps purposely) ambiguous in most cardholder agreements.
Discover uses:
“Cash Advance” means the use of your Account to:
• obtain cash from participating automated teller machines, financial institutions or other locations;
• purchase lottery tickets, money orders, casino chips, foreign currency or similar items.
Notice "similar items" can be open to varied interpretation.
Amex uses:
A purchase is a charge for goods or services. A cash advance is a charge to get cash or cash equivalents.
"cash equivalents" is perhaps less precise than Discover's list of examples, but really this one seems more clear in a way - if it isn't a "charge for goods or services" then it could be a "cash advance."
Chase uses:
The following transactions will be treated as cash advances: purchasing travelers checks, foreign currency, money orders, wire transfers or similar cash-like transactions; purchasing lottery tickets, casino gaming chips, race track wagers or similar betting transactions; and making a payment using a third party service.
Again, "similar cash-like transactions" is imprecise, so you get the idea...
Gift Cards are considered cash-equivalents. They are purchased for a set amount of money, and carry that exact amount as their value until depleted. They can be used by anyone who has possession of them (bearer instruments) regardless of who purchased them or how. They have no relation to the user's financial, banking, personal, or credit infomation.
Many retailers do let you purchase these with a credit card, and the transaction posts like any other purchase, and everyone goes on about their business.
Unfortunately, though, in some cases a credit card lender will process it like a cash advance, and when they do there really isn't much that can be done - you might have success with interest/fee forgiveness, depending on the relationship you have with the lender, but gift cards are for all intents and purposes "cash equivalents" and so under their agreements we all agree that they can treat those as cash advances, even if it isn't done consistently.
