If you read the text on the first screen when you visit her, it says: "She has a reward for you." You need to choose one of the sparrows on that screen...
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I did, over and over. Its not updating.
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In your original post you say, you bought sparrows. Buying is only available if you dismiss the rewards screen by pressing circle. Did you also try to choose one from the reward screen?
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I'm an idiot. Kiss me.
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Haha. Go finish that quest now Guardian.