How can I redeem points on Microsoft Rewards through Xbox?

Hello!

Hope you are well. I'll be glad to assist you.

I'm sorry you're experiencing these issues.

If your console shows no rewards available, try redeeming them through the website here:

https://rewards.bing.com/redeem/?form=dash_2

Best regards!

If you don't want to pay, you can always check out Microsoft Rewards where you can earn points (free and from certain purchases) that you
can redeem for Xbox Live and many other things. I haven't paid for Xbox Live for a while and I have an active subscription till May 2020, through redeemed Microsoft Rewards points.

I recommend following the steps mentioned on this link to claim your rewards: How to redeem Microsoft Rewards points

From the Microsoft Rewards Migration FAQ: "any unredeemed MyVIP Gems will be converted to Microsoft Rewards points and can be used to redeem rewards from the Microsoft Rewards catalog once your membership is transitioned. One MyVIP Gem will convert to one
Microsoft Rewards point".

If one gem equals one Microsoft Rewards point , and I have 500 Microsoft Points, that's roughly about 50 cents worth, because a $5 gift card is about 5,000 points.

Whereas if I were to redeem them through Xbox Live Rewards, 500 gems would get me 10,000 Rewards credits - if only such a thing were not "out of stock" - how does that work exactly except that Microsoft chooses for it be out of stock, so they force me to either
put up with giving me a tenth of the value or having to buy something useless like Overwatch wallpaper?

There are,

You can go to https://account.microsoft.com/rewards/redeem/ and select any of the items there. There are entries in various sweepstakes, gift cards (I'm seeing Starbucks, Gamestop, Xbox Live, Xbox currency cards).

This page explains how to redeem the points: https://support.microsoft.com/help/20541/microsoft-account-redeeming-rewards-points