Can the reward be a free drink from a short list, or does it have to be one dish?

One dish. When you choose a free item as the reward on Marketing → Loyalty & stamps, you pick a single item from your menu and that is what the reward gives. If you want the customer to choose, use a percentage reward instead, which comes off whatever they order. A loyalty rewards program for restaurants works best when the reward is obvious, and a named free item is easier to want than a choice. If the item later leaves the menu, the programme greys out and tells you why until you pick another. The Loyalty & rewards tab in the docs covers rewards.