customer referrals dont make sense to me

creating coupons and gift certificates seems pretty straight forward... I have made them and they seem to work

So I am attempting to use word of mouth advertising and want to use the customer referral feature.
at Configuration/Customer Details/Customer referral status... I chose option 1 (I still dont see what this does ??)

I created a coupon and made it so it can be used 10 times and only once per person
then i Edited my Test Customer and entered the code# in the Customer Referral 1st Discount Coupon

then I logged my test customer out and made a new one but there was no input box for a customer referral ??

just for giggles I logged into my first test customer account and used the code to buy something and was able to use the discount code successfully.

But It is not my intention for them to be able to use the code I want them to share the code to other people, and then once a new customer uses the code I will also send them a gift certificate for referring a customer.

Is there a way to exclude a person from the code ?
Is there an easier guide that better explains the customer referral feature?

BTW I searched quite a bit and found this post and it made zero Zense to me. there are no explanations of what each of the options really do. I dont feel that I am stupid I just cant wrap my brain around what this is supposed to do.

Innerchaos:

then I logged my test customer out and made a new one but there was no input box for a customer referral ??
In that mode there's never any box named "customer referral".
It works by having the customer USE THE COUPON during their purchase. And then the COUPON CODE gets stored AS THE REFERRAL SOURCE.
Read: http://www.zen-cart.com/content.php?60-how-do-i-set-up-customer-referral-tracking

DrByte:

In that mode there's never any box named "customer referral".
It works by having the customer USE THE COUPON during their purchase. And then the COUPON CODE gets stored AS THE REFERRAL SOURCE.
Read: http://www.zen-cart.com/content.php?60-how-do-i-set-up-customer-referral-tracking

OK I accept that

so what I did is at Configuration/Customer Details/Customer referral status... I chose option 2 which does open a referral code box when a new person signs up for an account.

I am going to give instructions via email to my customers that if they have their friend input the name of the referrer when they create the account.

I will just have to manually look at the new customers and see what the Customer Referral 1st Discount Coupon has in the field and just go back to the Gift Certificates/Coupons and make them both a new coupon to honor my agreement with them.

(originally I made coupons with a zero value and tested those to make sure they would work in the customer referral field but because there was no value to it it did not show up in the Reports/Customer Referral after they were successfully applied.)

If I understand it correctly I can make the coupon first and give it to a customer as a referrer code and that anybody he gave the code could also use it as long as I ensured that the number of times the coupon could be used was greater than 1. the problem with the original code is that there is no way to stop the customer from using it as a discount without ever referring anybody to the site at all. Of course I set the coupon parameters to only allow one use per person but that doesn't fix it.

(I am attempting to get more people to register to the site and hopefully get more sales in the long run.)

Innerchaos:

the problem with the original code is that there is no way to stop the customer from using it as a discount without ever referring anybody to the site at all.
Shouldn't you LET them buy (especially at the same discount) so they can try out your products and your shopping experience for themselves? That way they can give even more authentic word of mouth referrals?