Correct. My husband is a Target team lead and the 5% red card discount still applies. You just have a confused team lead.
And government mandated? That sounds like something a Disney CM might make up.
Yes..he said that there was a whole big deal about the cards 2 months ago and the government got involved and is not permitting them to honor the discount. I did buy them at Sams for almost 5% off but received an additional 1% because of the cashback on the credit card I used. But thanks for the info...there are restaurant cards I wanted to buy and I will raise the issue again.