It is good at Gapbaby/kids, but yes, you do need the coupon from the email, or the coupon received in the mail. I got one in the mail with and it has special sales for gap card holders, as well as the 45% off your entire purchase good for this weekend (fri-sun). It has a bar code on it that the cashier is to scan at check out, so unfortunatley I don't have a code to share. It's for instore only.
I used my coupon yesterday, and after checking out she gave me a booklet for "wednesday's". 4 or 5 coupons good for 40%-45% off (45% with gap card) one item for certain wed in Dec. I believe they were giving those out to everyone, but it may have been a gapcard perk as well, not totally sure.