Prevent verification in this application is gives the merchant the ability to process a transaction without receiving approval from the processor. The transaction is not verified so the credit or gift card which is used may not be valid.
Gift Cards
In gift cards, STS gift cards have the option to be "prevent verified." This will allow the merchant to processes their own gift cards without processing with the STS service. Transactions are still being tracked for the purpose of reports.
Credit Cards
Credit Cards can also have "prevent verification" which will allow the customer to bypass the card swipe and process the transaction. This is mainly used for the merchants with a separate machine for their card processing. Transactions are still being tracked for the purpose of reports and the merchants can match their sales on the POS to their credit card machine.