Having worked for Target, I had never seen such a policy. I know it had been done time to time in good faith when there was an issue say you hit your credit limit or there was a return and you no longer had the correct credit line for your exchange. Something like that. If you attempt this while trying to purchase $5,000 in gift cards, I would imagine Target would say no to applying a 5% discount, and would then enforce a gift card limit. It seems like these days if I try to walk out with more than $500 of any gift card, I get stopped in my stores. I now just purchase them online.