Does GS give store credit as a gift card so it can be used online for digital purchases, or is store credit only usable in store?
You can buy anything they sell in the store with it. I traded in my 360 and most of my PS3 and 360 games when Gamestop was doing a double trade in credit promotion just before the PS4/Xbox One launch.
Anyways, during one of the Steam holiday sales I remember buying $100 in Steam wallet funds with some of that store credit. I'm sure you could do the same thing with PSN or Xbox Live store cards.
Edit: Your credit can be used on Gamestop's website too. Mine was tied to my Gamestop rewards card so I just entered that number to use the credit on their website.