Its in-house marketing team is drawing up a shortlist of four agencies to compete for the account next month.
The successful agency will be responsible for relaunching the rewards scheme and revitalising the brand.
It is not known if Barraclough Edwards Chamberlain, the incumbent direct marketing agency, will pitch for the business. The agency won Nectar's £1 million quarterly mailing DM account in January last year.
Nectar recently launched a series of environmental initiatives in order to compete with Tesco's "green" ClubCard.
The campaign comprised a test-mailing scheme offering extra points for purchasing ethical products. The offers included a bonus for Sainsbury's So Organic range.
Nectar's parent company, Loyalty Management Group, recorded an operational loss of £40 million in 2004.