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Sainsbury's Smartshop and giftcards
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I think we already solved the issue though. Local stores don't offer "proper" SmartShop where you pay at a till, you'll need to scan the goods at a till to use a giftcard. Only full-size stores offer full SmartShop with payment at a till.
Doesn't surprise me that the frontline customer service team don't know it, so take their offer of the specialised customer service.1
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