What is a GFCI outlet and why do you need one?

GFCI stands for 'Ground Fault Circuit Interrupter'.

A GFCI outlet is a special electrical outlet that has a built-in safety feature. To prevent electrical shock, the outlet has a form of breaker built in to it. 

If you've never looked at one, the buttons on the front are a 'test' button to make sure it's physically functioning and able to cut off the power (as a mechanical device, it's not impossible for them to stick so it is good to check them now and then), and the other is a 'reset' button to turn it back on.

They're relatively new (in terms of the history of people using electricity), but building standards have adopted them widely.

Mostly seen in kitchens and bathrooms, they should really be installed anywhere that an outlet is within a short distance from a water supply, including outside due to the elements.

One might wonder why an outlet needs its own cut off feature if there are breakers at the electrical panel. But there is a key difference between the way the GFCI operates and the way a normal circuit breaker works that makes them an important safety item.

A circuit breaker at your panel has a certain current rating, at which point it will cut off, typically 15 amps on a normal circuit.  This will keep more that the rated current from passing through the wires, which is important to prevent over-heating and a risk of fire.  However, the current has to build up to 15A before it cuts off, so it doesn't really prevent electrical shock.  You'll briefly have 14A going through you before it hits 15A and cuts off. And it doesn't take long for electrical shock to become deadly.

The GFCI, on the other hand, does not operate based on how much current is going through, but rather how quickly the current is changing.So if it detects the beginning of a rapid spike in current - as would be the case in a short circuit or electrical shock - it will cut off way before it gets to the maximum current allowed by the circuit breaker.  This greatly reduces the risk of deadly electrical shock.

Older homes quite likely won't have them, because they were not required by code. If you do renovations, then your contractor should be installing them as required.  But if you'd like to add this safety feature to existing kitchens, bathrooms, laundry, etc, contact a qualified electrician to get a quote.  It's not a bad safety feature to have.