The Rewards Catalog Decision

For companies operating US or international incentive, loyalty and recognition programs, the question is increasingly not whether they can maintain their own rewards catalogs, but whether doing so remains the best use of their resources.

By Jason Etter
Vice President of Growth, Online Rewards

A Catalog Is an Operating Function, Not Just Technology
International Programs Change the Equation
APIs Have Changed the Build-Versus-Buy Choice
Outsourcing Infrastructure Does Not Necessarily Mean Giving Up Control
When Maintaining Your Own Catalog Still Makes Sense
The Decision Has Changed Even as Development Gets Easier

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For years, maintaining a proprietary rewards catalog was a logical part of operating an incentive, recognition or loyalty program. Today, the decision deserves another look. Modern technology has made catalogs easier to build, but operating them still requires supplier management, merchandising talent, constantly changing product and pricing data, fulfillment, customer service and financial administration.

These challenges multiply internationally, where currencies, local brands, cultural preferences, tariffs and other taxation, shipping and other requirements enter the equation. At the same time, APIs and hybrid models make it possible to outsource much of this infrastructure without necessarily giving up control of the participant experience, merchandising or margins. The decision therefore comes down to four questions: What does it really cost to maintain the catalog; how much additional complexity comes with international operations; how much control can be retained using outside infrastructure; and is catalog management actually a source of competitive advantage?

A Catalog Is an Operating Function, Not Just Technology

A rewards catalog looks relatively simple from the participant's perspective. Someone searches for a reward, sees its point value, makes a selection and expects it to arrive as promised. Behind that transaction, however, someone has to effectively merchandise the products to appeal to varying groups of participants, maintain product information, pricing, availability, supplier connections, ordering rules, shipping requirements and fulfillment status.

That distinction is important when evaluating build versus buy. The cost of an internally managed catalog is not simply what it took to develop the ecommerce interface or connect the first suppliers. It includes developers, procurement, merchandising, finance, supplier management, catalog administration, quality assurance, customer service and exception handling. As an earlier RRN Build vs. Buy analysis noted, product merchandising, data maintenance, supplier management, customer service, compliance and fraud monitoring represent continuing operating costs.

The problem becomes more apparent as the catalog grows. A new hot product comes on the market with special pricing. A supplier changes the price of an item in the morning and runs out of inventory that afternoon. If the catalog refreshes only overnight, participants can continue seeing an offer that is no longer available under the displayed terms. Multiply that issue by thousands of products and multiple suppliers and what appeared to be a straightforward ecommerce application becomes an ongoing synchronization and fulfillment operation.

Gift cards have their own complications. Denominations and brands differ by market. Physical merchandise adds shipping and return requirements. Travel, prepaid products and experiences each introduce their own fulfillment processes. The relevant calculation therefore is total operating cost, not simply technology cost.

International Programs Change the Equation

For companies operating only in the US, an internal catalog can remain manageable, particularly when the selection is relatively controlled and supplier relationships are stable. Going international changes the economics considerably. Each additional market can introduce new products, suppliers, currencies, contracts, tax considerations, payment processes, shipping requirements and customer-service expectations. More importantly, global does not mean creating a US catalog and translating it.

A reward that is attractive to an employee or channel partner in Dallas may have little relevance to someone in London, Sydney or Singapore. Brands, price points, product availability and cultural preferences vary by market. The earlier RRN Build vs. Buy analysis identified cultural relevance and local availability as separate challenges of global rewards fulfillment.

Currency creates another layer. Participants generally expect rewards to be presented in a currency that makes sense to them, while the program operator may want centralized billing and reporting. Someone also has to manage foreign exchange, supplier payments and reconciliation.

This is why the decision to maintain a proprietary US catalog can be quite different from the decision to build and maintain a global one.

APIs Have Changed the Build-Versus-Buy Choice

The traditional alternative to building a catalog was essentially to buy somebody else's solution. APIs have blurred that distinction. An organization can now maintain its own participant interface, merchandising strategy, branding, point system, search capabilities and business rules while connecting behind the scenes to outside rewards infrastructure. Instead of establishing and maintaining separate integrations with every supplier, a company can potentially access many suppliers and reward categories through a single connection.

For example, CatalogAPI's platform provides access to more than two million reward options, while its international offering covers more than 120 countries and territories. Its API integration model is designed to put multiple supplier and fulfillment relationships behind a common technology layer.

This does not mean that every program requires a live API. A company with a mature ecommerce platform may prefer to periodically import a managed catalog while retaining its own search, merchandising and checkout capabilities. CatalogAPI's fulfillment-only documentation, for example, describes a model in which catalog information can reside in the customer's own application while orders and fulfillment are handled through the API.

The tradeoff is freshness and merchandising effectiveness. Periodic imports create an interval during which price, inventory or other information can change. A live API can reduce that synchronization gap, while a fulfillment-only model can revalidate critical information when the order is placed. In other words, the choice is no longer simply build or buy. It can be build, import, integrate—or combine all three.

Outsourcing Infrastructure Does Not Necessarily Mean Giving Up Control

One of the strongest arguments for maintaining a proprietary catalog has traditionally been control. That remains legitimate, but companies should distinguish control of the participant experience from ownership of the underlying infrastructure.

A program operator may still determine which brands, products, categories and price ranges participants see. It can establish different catalogs for different clients, countries or programs. It can retain its own website or application and potentially determine the final price or point value presented to participants. That creates an important distinction: outsourcing supplier connectivity and fulfillment does not inherently require outsourcing merchandising strategy, customer experience or program economics.

The same applies to margins. Maintaining an internal catalog creates fixed and semi-fixed costs across technology, personnel, procurement, finance, supplier management and customer service. An outside platform may convert portions of those expenses into transaction or service costs. The meaningful comparison is therefore not simply the supplier's product price versus the API provider's price. Companies should compare total economics: product cost, purchasing leverage, technology, labor, administration, customer service, fulfillment and the margins they can generate under each model.

Direct procurement can still produce excellent economics for organizations with sufficient purchasing scale. An API provider, however, may aggregate purchasing volume across many clients and suppliers. Each company needs to determine which structure produces the better overall economics for its circumstances.

When Maintaining Your Own Catalog Still Makes Sense

None of this means proprietary catalogs have become obsolete. For a large distributor, gift-card network, procurement organization, ecommerce company or rewards provider, supplier sourcing and fulfillment may themselves represent competitive advantages. A company with significant purchasing power may negotiate economics that would be difficult to duplicate through an intermediary. An organization may also have specialized merchandise, proprietary rewards or unusual fulfillment requirements that justify direct control.

The question is whether those capabilities actually differentiate the business.

If customers choose a company because of its procurement expertise, exclusive supplier relationships, merchandising capabilities or fulfillment economics, maintaining the infrastructure can make strategic sense. If customers are primarily buying program design, recognition strategy, loyalty expertise, analytics, communications or customer experience, maintaining dozens of supplier feeds may contribute little to what makes the company distinctive.

That is the opportunity-cost question behind the entire decision. Every developer fixing a product feed, every finance employee reconciling another supplier and every service representative resolving a fulfillment exception represents resources that cannot be deployed elsewhere.

The Decision Has Changed Even as Development Gets Easier

AI-assisted software development is making it easier and less expensive to build interfaces and integrations. Ironically, that may make the build-versus-buy analysis more important rather than less. Writing code faster does not eliminate supplier negotiations, discontinued merchandise, inventory changes, currencies, invoices, customer inquiries, refunds, replacements or fulfillment problems. The visible technology may become easier to create while the underlying commerce infrastructure remains operationally demanding.

Companies considering whether to maintain their own US or international catalogs therefore should resist asking only, "Can we build this ourselves?" For most, the more useful question is: "Which parts of the rewards experience create competitive value for us, and which parts are infrastructure?"
Once that distinction is clear, the architecture becomes easier to determine. Some companies will have good reasons to continue owning the entire process. Others can maintain their own participant experience while importing an outside catalog. Still others may benefit from a real-time API handling much of the catalog, supplier and fulfillment infrastructure.

The objective is not outsourcing for its own sake. It is making sure that the resources devoted to rewards sourcing, catalog management and fulfillment produce enough strategic or economic value to justify maintaining them.

Chart 1: Three Approaches to Rewards Catalog Infrastructure

Approach	Best Fit	Primary Advantage	Primary Tradeoff
Build and maintain internally	Organizations where sourcing, merchandising, procurement and fulfillment are strategic capabilities	Maximum control over suppliers, data, economics and participant experience	Internal team owns integrations, synchronization, supplier management, fulfillment exceptions and maintenance
Periodically import a managed catalog	Existing platforms with mature search, merchandising and checkout experiences	Preserves the company's storefront and data model while reducing sourcing requirements	Product and pricing data can drift between refreshes; company still maintains ingestion and catalog logic
Use a live catalog API	Programs requiring broad selection across multiple suppliers, markets, currencies or reward types	Reduces supplier-integration and catalog-maintenance requirements while providing more current information	Creates dependency on the API provider's technology, data model, supplier network and operating policies

Chart 2: 20 Questions to Ask Before Maintaining Your Own Catalog

Question	What Management Should Evaluate
1. How often does our catalog change?	Price, inventory, denominations, products and supplier availability can change independently.
2. How stale can participant-facing information become?	Determine an acceptable synchronization gap rather than assuming periodic updates are sufficient.
3. What happens if a price changes before redemption?	Determine whether pricing is validated again before fulfillment.
4. What happens when an item becomes unavailable?	Identify who owns substitutions, refunds, participant communications and other exceptions.
5. How many supplier relationships are we really maintaining?	Include contracts, credentials, feeds, ordering logic, invoicing, support and fulfillment rules.
6. Does each new supplier become another integration project?	Different data models, authentication and ordering processes can create technical debt.
7. How many reward types do we support?	Gift cards, merchandise, travel, experiences and prepaid products have different fulfillment requirements.
8. What happens when we add another country?	Consider suppliers, currencies, languages, shipping, fulfillment, taxation and local preferences.
9. Are rewards displayed in appropriate local currencies?	Participant-facing currency and corporate billing currency need not necessarily be the same.
10. Who manages currency conversion and reconciliation?	Measure the finance and administrative burden as international volume grows.
11. Does the same reward selection make sense everywhere?	Local relevance matters as much as catalog size.
12. How much choice do participants actually need?	More is not automatically better; sufficient locally relevant choice is the objective.
13. Are participants having difficulty using accumulated points?	Examine selection, perceived value, relevance and availability before simply issuing more points.
14. Are reward prices competitive?	Compare common rewards with outside market prices and measure purchasing leverage.
15. What does catalog maintenance actually cost?	Include technology, procurement, finance, supplier management, QA, service and exception handling.
16. How much developer time is spent maintaining rather than improving the program?	Measure the opportunity cost of catalog infrastructure.
17. Must we replace our storefront to use outside infrastructure?	Hybrid and fulfillment-only models may allow the existing experience to remain intact.
18. Do we need a live API or is a periodic import sufficient?	Balance real-time accuracy against control of the existing ecommerce environment.
19. How are fulfillment changes communicated?	Evaluate polling, webhooks and other methods for communicating order and exception status.
20. Is catalog management something customers actually pay us to be good at?	Determine whether sourcing and fulfillment create competitive differentiation or primarily consume resources.

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