How do loyalty points work?

Go to Settings → Loyalty and define two rules: earn Y points per X spent, and redeem N points for M off (with an optional per-order redemption cap). You can also grant welcome points to new members automatically.

Select the member at checkout and points accrue automatically; to redeem, enter the points to use. Voiding an order takes back the points it earned and refunds any points that were redeemed.