How can I redeem points for a customer when entering the order through the admin?

As of MageRewards, you can now spend points in the admin panel when placing an order on behalf of your customers.  Once you have added an item to the order, you will see the option to Spend Points.  If your customer has points in their account, you will see the slider appear.  If a customer does not have any points, then you will see a message advising you that the customer can't spend any points on this order.

In MageRewards version and below: There's actually no interface designed in the back-end to allow you to spend points on an order. The order must either be placed from the front-end to enable this, or points will have to be adjusted manually as described above to compensate for spendings/discounts in the order.

From the admin panel you can view a customer's points balance or make manual adjustments to their balance. A simple way is to do this through the Magento Customers interface in the admin panel.

Also when you place an order from the backend, assuming the order items match the earning rules defined in the system, the customer will automatically earn appropriate points on the order.

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