Hi,
You need to enter something in the "rates" field there so that when someone purchase a product from that category, the user will receive the equivalent in points.
But then, I don't see how that will help you provide a "20% discount if they have already bought one product".
What I would rather recommend is to use a mass action to add a special group to the users upon purchase.
That way, it will be easy to add the discount as you'll just have to restrict it to the users in that user group and set it at 20%.