After downloading a Nectar-themed Yahoo! toolbar, cardholders can earn up to 50 Nectar points per month, gaining one point for every two searches.
It is not clear whether Nectar will make use of search data gathered through the toolbar.
The toolbar also notifies users where they can collect more Nectar points should they make an online purchase.
Roger Sniezek, Nectar e-commerce director, said: "This unique partnership with Yahoo is the only one of its kind. It has enabled Nectar to make a user's online journey truly rewarding by letting them collect Nectar points at the start as they search, and at the end at the point of purchase.
"The Yahoo! toolbar brings all these elements together with the aim of increasing the number of Yahoo! users and allowing Nectar to go the extra mile and reward collectors in new ways."
A Nectar logo will appear next to those shopping websites that award Nectar points, and a coloured light will also appear on the toolbar to show where points can be collected.
A green light indicates that points are being collected, red means no points have been collected, and grey light sites don not participate in the program.
Participating Nectar retailers include Sainsbury's, Argos, Blockbuster and BP.
The toolbar will be promoted with a mass e-mail to all Nectar users and followed up through a full range of Nectar's marketing channels.
Nectar is also planning to use location technology to provide mobile users with offers via its iPhone app.
