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Also, I just got off the phone with LA customer service, and they said:
1. Store credit counts towards the free shipping minimum. The credit is only applied after your total is calculated for free shipping.
2. Store credit can be used towards any product sold on the LA/DD website. This includes dry goods. LA said it could even be used to cover the cost of taxes.
It seems that @TheOne had a different experience, so I don't know what to say to that.
Yes, the credit is only applied after you meet the $149 minimum for shipping. And my experience is they tell you what you want to hear over the phone. Trying to actually use the store credit is another story. Good luck. I got my money back from PayPal. Their customer service basically told me if I disputed it then they would not accept paypal payment from me again.