The 28% is simple interest. You borrow a buck, you pay back a buck 28 when you pay off.

A bank loan will be amortized at a rate and in a manner commensurate with the bank's risk exposure. It's hard to pin down what the loan structure would be regarding rate and amortization without knowing RBW's complete financial and past performance picture. However, if they are willing to pay 28%, I'd expect that they are looking at a rate of more than 10% for more than two years. The 28% is more than they would have to pay a bank, but not egregiously so nor unaffordably so. It also has the benefit of putting RBW in control of the 'venture capital' and avoiding the loan process, the oversight, and having the loan payment hanging over their heads.

By selling gift cards and giving an extra 28% credit, they only have to pay back that 28% if the investor buys something. And when the investor buys something, they are buying something that costs RBW 25 cents, which RBW is selling for a dollar. The profit may be less than it would otherwise be, but the markup covers the 28% credit obligation. The customer generates the cash flow to pay the obligation. If they owe the bank a monthly payment, they must make that payment even if not a single dollar shows up in the till for the month. In a sense, it's a bit of borrowing from Peter to pay Paul, but it works out.

What would be really nice is if they had a cash reserve to tide them over these cash-flow crunches, but that can be hard to do when your business model is selling things that are very nice but not necessities. You are really subject to fluctuations in the economy's pool of discretionary income.