I have $3 in rewards. I apply all $3 to the cart. The total Cart lowers $3. The receipt only shows $2.20 applied from my rewards to my balance and my rewards balance is now .80.

What is this scenario?

This is a post-tax scenario. Discounts applied in this scenario are configured as both post-tax and rewards set as a discount. This results in the discount both reducing the pretax subtotal (product) and calculating the relevant tax saving. So, in order to reduce the total by 3.00, it would reduce the pretax total by $2.20 which also equates to an .80 tax savings totaling $3.

Think of it this way, when you reduce the pretax cost, you also reduce the sales tax liability. So, reducing the ticket by 2.20 also decreases the tax by .80 so the total savings is $3.00 off the previous price. But it only cost you 2.20 in rewards to do that because you don't have to pay the .80 in tax savings.

Rewards as Payment would apply to the grand total, paying off the grand total instead of discounting the pretax subtotal.