Well you got part of it correct.  Most people realize that it gets people back in the store since the retailer puts the gift card in the item that you are buying.  Therefore, you cannot use the gift card on the current purchase. This is where you got the first step correct, which is to get you back in the store to make you buy additional items. 

For me, I would make the $350 purchase for the XB1 and then go back to the store to use my $70 credit.  Hence, in my mind, I am only saving $70...which is the way the retailer doesn't want you to think.

Here is what you and most people do.  You can even see it in your headline...XB1 bundle for $280 at Target.  So in your mind, you are already subtracting out the $70 gift card out of the bundle, and thus already saving $70.  

Lets take you for example.  You are an avid shopper at Target and would spend that Target gift card rather easily on groceries, clothing, etc.  Now you go back to Target lets say a week later since you go there so often.  Some people wouldn't go back there again maybe a month or a couple of months down the line....wouldn't you agree?  I am saying this because most kids would be busy playing AC Unity and blackflag before using the gift card on a likely XB1 game in the future.

But lets continue with you purchasing clothes and groceries.  Now you are at the checkout counter and the bill rings up $100, so you pull out the gift card to use it towards your items.  Now the bill rings up to a total of $30 and you therefore feel that you saved another 70 dollars on this purchase as well.  

So Target made you think that you were saving $70 dollars to justify the XB1 purchase to begin with and they make you feel that you saved another $70 to justify the loads of items that you buy the second time around.  You therefore FEEL that you saved $140 when in fact you only saved $70.  

Now before you say that this wouldn't happen to you, let me ask you this question:  At what point does ANYBODY feel that they are spending money when they use a gift card?  Most people subtract off the gift card value at the intial purchase but then forget they did this when they make their second purchase.  Therefore, your average consumer will subtract this value out twice.  

Btw...thanks again for calling me a fanboy earlier.  Open your eyes next time before you say things like that.

I would say I stand by my fanboy comments, but since I was given a warning...

I would never feel like I saved 140 bucks from a 70 dollar gift card.  I have no idea who would feel like that.  You're trying to make this overly complicated for reasons that only you know.  

insanely good deal,i'd take gift cards anyday of the week,to me gift cards=$$$,buy whatever you want. target ftw this holiday

They also have some great deals on the Wii U and 3DS right now for people looking for those.

WOW!  So yet again you are calling me a fanboy?  You are so classy epicurean...

I am trying to have an intellectual conversation and this is what I get in return?  Why did I waste my time explaining that to you if you still chalk it up as fanboyism?  I mean seriously...

I am also sorry that this is so "overly complicated" for you to understand.  Have a good day.

I certainly said I did NOT call you a fanboy a second time. I was told not to do that.

You wrote 7 (SEVEN!) paragraphs on how someone is led to believe they are saving $140 dollars, but really saving nothing with a $70 dollar gift card. Think about that for a moment.

I say you are basically saving $70 dollars with the purchase, as you can use that money to spend on other items.
(That's it. One sentence. It's NOT THAT COMPLICATED.)

You also completely shut down my argument initially by saying "No it doesn't depend on the customer." No, "I could see how you see it that way", or "Some people might view it like that", just a straight "nope, you're wrong." You started all this, not me.

First, you really really need to calm down.  Second, you asked me to explain how I got to $140 so I did.  My apologizes that it took me seven paragraphs for me to explain the scenario when in the end, you still didn't understand it.  I guess I should have written a novel for you next time.  

Second, I never once told you that you are wrong.  I even said that you got part of it correct in my long winded (SEVEN!!) paragraph post.  Me saying "well you got part of correct" means "nope, you're wrong" in your eyes.  Got it...

Well then let me rephrase:
It does depend on the consumer.  Those that get tricked by the retailer and those who don't.  Better?

That is tempting indeed. Target are on fire now with the $250 Wii U too.

So you're basically still saying anyone that thinks they are saving $70 are too stupid to understand they aren't?  

The reason I originally called you the dreaded "F" word was because the other possibility (the fact that someone actually believes they are saving no money) seemed too crazy to be true, and that you were just trying to spin it for your own cause.  I apologize for giving you the benefit of the doubt on that one.

A novel would not help.  What I'm trying to say is that if it takes 7 paragraphs to explain something as simple as a gift card, you're probably overthinking it.  You are certainly entitled to your opinion, it's just not one that I believe to be correct (as most would agree).

You are not paying $280 for it. Its $350, try to walk into target with $280 and see if you can buy it with that. Price is $350 regardless.