Just received an email from Zappos. They take your reward points at this time and convert them into reward codes.
It seems that they are rounding up to at least $5. We did not not the minimum, but still received $5 off.
There doesn't appear to be anything that you can get free, but there are some items less than $3 after the code. Sale items sorted from price low to high here:
"This $5 Rewards Code is good towards your favorite shoes, clothing, bags, and more. YAY!
You're receiving this code because it's the time of year where we automatically convert unredeemed Rewards Points into Rewards Codes. We've even rounded you up to a $5 Rewards Code, so you can have a little extra fun while shopping!
Your Rewards Code will automatically appear in your cart during checkout and is good for a one-time use. All you have to do is shop like you normally would, and we'll take care of the rest!"