The Service Flag should be displayed in a window of the residence of the person(s), who are members of the immediate family. The Service Flag may also be displayed by an organization to honor the members of that organization serving in the Armed Forces during a period of war or hostilities.

Based on the star symbols used on the Service Flag, the term "Blue Star" has come into use in the United States as a reference to having a family member on active military service, while the term "Gold Star" has come to refer to the loss of a family member in military service. For example, the mother of a person who died in service is referred to as a "Gold Star Mother", and the wife of an active service member is referred to as a "Blue Star Wife".

Charitable support organizations have been established for Gold Star Mothers, Gold Star Wives, Blue Star Mothers, and Blue Star Wives. The last Sunday in September is observed as Gold Star Mother's Day, Gold Star family members are entitled to wear a Gold Star Lapel Button, and all 50 U.S. states and Guam offer some form of a specialty license plate for motor vehicles owned by Gold Star family members.

The use of the terms has sometimes been restricted to refer to service during specific armed conflicts. For example, the service banner originally applied only to World War I, and it was later expanded to include service in World War II, then the Korean War, then other specific conflicts, and then "any period of war or hostilities". In some current uses of the "star" terminology, there is no longer any distinction made about the place or time or degree of hostility involved in the military service.^[2] For Gold Stars, the Department of Defense also makes a distinction about the manner and place of death, but some other organizations do not.^[3] The Gold Star term is also sometimes interpreted to apply to those missing in action and those who did not die during active service but died later as a result of an in-service injury.^[2]

A lesser-known practice of using a silver star to indicate a service member that has been disabled is sometimes also followed, although this practice is not recognized in federal law.