How Pre-Paid Phone Cards Work
Most pre-paid calling cards display a local or toll-free access telephone number and a personal identification number (PIN). The companies that issue the cards have computers that use your PIN to keep track of your card usage — how much time you have on your card in minutes or units. To make a phone call, you dial the access number, enter your PIN, and at the voice prompt, enter the phone number you want to reach. A computer tells you how much time — or how many units — you have left on your card, and how to use other features your card may offer. If your pre-paid phone card can’t be recharged — that is, if you can’t use the telephone to buy additional minutes for the card — you’ll need to buy another card once you’ve used up the time or units on your card.
When you buy a pre-paid phone card from a store, it’s important to remember that the store doesn’t control the quality of the service. To make sure you’re getting what you pay for, try buying a card for a small denomination first to test out the service.
(source: http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro04.shtm)