Rewards is a distinct system from offers, with its own targeting, its own analytics dashboard, and its own configuration surface, even though it shows up in similar places (cart drawer, checkout) — the practical difference is that a reward tracks a shopper's progress toward a threshold (a dollar amount, usually) rather than recommending a specific product to add, and can apply its result automatically once that threshold is crossed.
Thresholds can be tiered — a shipping discount at one level, a larger discount or a free gift at a higher one — rather than being a single all-or-nothing cutoff, which is what makes the progress-bar UI meaningful: it's showing progress toward the next tier, not just a binary qualify/don't-qualify state. Shipping and order discounts tied to a reward tier are configured separately from any free-gift product reward, so a single reward program can combine both without one setting overriding the other.
Because Rewards has its own analytics, don't expect reward-driven revenue to show up inside offer-level analytics — the two systems report separately, which matters if you're trying to account for all revenue impact in one place.