It's my understanding the $12.50 per thousand points only applies if someone is purchasing points either for themselves or someone else. If a Rewards member already has points they would like to give to another Rewards member then there should be no fee in gifting. Here is a copy and link to the term and conditions:
Well bighead I guess I gave you incorrect information. I have read that information many times and always interpreted it to say it cost to gift points. I was thinking on the lines of airline miles which cost a friend of mine when he transferred miles to me and figured they were the same I guess. I apologize for leading you astray. Thank you vaboywnder for clearing up the situation.