Can I use a Gift Card for past due invoice?

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Gift cards work by being present as credits on an invoice.

Where the customer has an invoice that is in dunning and redeems a gift card meaning to use it to pay the past-due invoice, you will have to close the old invoice and generate a new invoice. The new invoice will then include applicable credits. 

You can find more detailed information about Gift Cards in our documentation: https://docs.recurly.com/docs/gift-cards