These are the steps to use this function.
1 - Open a product in the Edit Window.
2 - Enter the Points you receive when purchasing this item.
3 - Enter the Redeem points needed to get this product for free.
4 - Settings / General, check box for "Offer to Redeem Points"
5 - Note: Customer / Loyalty Points, convert to Store Credit must be all zero for the Redeem option to work.
6 - Sale this item with a customer selected. They will get the points.
7 - Sale the same item (or another item with the Redeem value set) with the same customer. If they have enough points, the redemption window will open.