Checkout Frugal Finders receipt below.  He was given the option to redeem $1 or $2 in points by the cashier, not on the pin pad. 

It appears this change may not have hit all registers yet, so you may have to wait a few day.

This is also reflected on the Walgreens Official Terms & Conditions Page.   It says:

“When purchasing items and/or services at a Participating Store, Member may choose to either redeem earned Points or continue saving Points to use on a future purchase of items and/or services. If Member elects to redeem earned Points, the Points will be converted into Redemption Dollars and the value of the Redemption Dollars will be deducted from the total price of the Member’s purchase of items and/or services from a Participating Store. Earned Points are converted into Redemption Dollars in eight(8) tiers:

(1) 1,000 points = $1
(2) 2,000 points = $2
(3) 3,000 points = $3
(4) 5,000 points = $5
(5)10,000 points = $10
(6)18,000 points = $20
(7)30,000 points = $35
(8)40,000 points = $50 ”

Thanks to Frugal Finders for receipt picture

Are you excited about this change?

It might help you lower your out of pocket on smaller transactions.