That's not quite correct. To read from a variable and write to a variable you need to add a backslash to both the input & output variables

  use IO::Compress::Gzip qw(gzip $GzipError);

  my $compressed;
  if(gzip \$foo => \$compressed [,OPTS]){
   # Compressed version of $foo stored in $compressed
  }
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If you want the output to go to a filehandle

  # assume $fh is a filehandle
  ...
  gzip \$foo => $fh
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If you want to send the output to standard output, use "-"

  gzip \$foo => "-"
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Paul