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Is a store allowed to refuse a gift card for payment due to a discount on a purchase?

Question Details: I received a corporate gift card from a well known furniture company, due to receiving damaged merchandise. I was offered a $250 refund or $500 gift card, I accepted the gift card. Fast forward 2 years later, I called corporate to verify that I can still use the card. Their response was yes, it is same as cash. I went back to the store, bought several pieces and negotiated a deal for the numerous pieces. When it came time to process payment, I gave them the gift card and the manager refused to take the card. His reasoning was that he discounted the furniture enough and he wasn't discounting it anymore. I explained to him that it is a gift card and to be treated same as cash. Corporate had already emailed the store to let them know I would be coming in and that it is an authorized card but he refused to accept it. Is this legal? If not, what can I do. This is my second attempt to use this card and have had problems both times.

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