If you don't see the 5% coming off at the check out screen, then you haven't done it right.
Do you have your REDCard saved as your default method of payment? If not, cancel the order and start over. Put your REDCard information in your account and save it.
Then add the GCs to your cart. From your cart, hit the proceed button. Log into your account again, if necessary.
Hit save & continue on the shipping page unless you need to modify the shipping address.
Under "How Do You Want to Pay?", choose your REDCard. Don't panic. It has to be done in this order for the discount to apply. Hit save & continue again.
Your 5% will come off of the total. Now look beneath the total. There's a list for applying promo codes, team member discounts and gift cards. Click on the GC link. It will take you back to the "How Do You Want to Pay?" page. Now enter your GC information. The discount will remain but the payment will come from the Target GC first with any remaining balance coming from the REDCard if needed. Hit save & continue.
Review your order to make sure that the discount stayed and that they did not add sales tax. If you're satisfied, then click on "complete order" to finish.