We have 3 stores and all 3 are reporting that their reciept printer is not working. Shopify support says that it's because our IOS is not up to date(and can't be because it's no longer supported)

You are not missing something.The physical gift card is not reusable.We ran into this issue when we switched to Shopify as well. We are less than impressed by Shopifys gift card function in general.