Every dollar spent accrues 1 point. Points are never accrued on anything other than the spend on products. Shipping is 12.95 on all orders until you accrue 150 points.
You can upgrade shipping to 19.95 for an express service at this stage. After accruing 150 points your customer status changes to HOBBYIST and you receive 10% off all orders at the checkout BEFORE shipping (no discounts on shipping).
After 500 points the automatic discount at checkout increases to 15% and your customer status changes to CRAFTROOM, shipping is a flat 12.95 express service. Once you get to 1000 points, discounts increase to 20% and shipping is 8.95 express service and your status changes to ENTERPRIZE.