What does "A penny for your thoughts" mean?

Simply saying "a penny for your thoughts" is used when someone is in deep thought and we want to know what that person is thinking about. For instance, when we see a friend quietly sitting at her desk and seemingly thinking of something, we can get their attention and say, “A penny for your thoughts.” 

That friend would then reply with whatever they were thinking about at the moment like, “I’m wondering about what gift to give my mom on her coming birthday.”