That's the simplest form of rewarding and the one most of our customers are using.
Let's say that you run a restaurant and in your website people can make reservations through a form on that website. You can be offering an incentive for people to refer their friends to make a reservation, for example, a discount coupon for each referred friend.
You will be giving out these coupons on a case by case basis, by checking your campaign dashboard you will be able to see who is eligible to get the reward and send it out to them.
That's the case for Manual Rewarding. The other two options are more advanced so, unless you know what you're doing, Manual Rewarding is the way to go!
Startup Threads (a.k.a. INK'A)
With Startup Threads (INK'A) you can automatically send out T-shirts and other company swag to your superfans who refer others to your campaign. You can read more about how that works in our documentation article, here: Using Startup Threads (a.k.a. INK'A) to reward your participants
This is the most advanced form of rewarding but the most versatile. You can integrate your Refer a Friend campaign with your web app then you can be offering rewards related to your service, like Dropbox did by offering 500 MB for each friend that signed-up.
The integration means that your web app will be using the Viral Loops API to check for pending rewards, provide them (internally) to your users and then mark those same rewards as redeemed so they will not be provided twice.
You can read the relevant API documentation, here: API Rewarding