Cashback Programs, MLM's

Is Lyoness a Pyramid Scheme? – What You Should Know

Lyoness reviewLyoness is a loyalty shopping program that rewards its members for shopping. In addition to this they also reward their members for recruiting in other members and from the members that those people then recruit in. Sounds a bit like a pyramid scheme doesn’t it? But is it really? Is this a good loyalty program that is worth joining or is Lyoness a pyramid scheme that you should stay far away from.

The promotional material thrown out there by Lyoness can be very luring. They make it seem like members are living the dream from being a member and receiving all the rewards/incentives offered…. but is this really the case? In this review I will be going over the reality of this all. And by the way, I am in no way affiliated with this program so this review is going to be as honest as possible.

Lyoness Review

Ok, so Lyoness is a cashback program at its core. Basically what they do is partner with different merchants and the merchants pay them for sending customers their way. So what Lyoness does is offers cashback as incentive to shop at their partner merchant stores and when you do shop their they get paid, giving you a small cut of that pay. They tell you that they pay up to 5% cashback but it usually seems to be around 1-2%.

They are partnered with over 90,000 merchants worldwide and have a cashback card that you can use or a mobile app.

The other way that Lyoness rewards members is with shopping points (SP), which are equivalent to money. For example, each SP equals about 5-10 euros.

Below is a short 2 minute video that does a good job of explaining this all…

But anyways… that isn’t really the point of this review. Cashback programs are legit and I have reviewed plenty of them on this site. The point of this review is to look into the question of whether or not this all is just a pyramid scheme or not. This question comes into play when you look at how Lyoness rewards members for recruiting in others.

Compensation Plan

As a member you can recruit in other people to earn more than just cashback if you wish too. So the people you recruit in will be normal customers and other marketing members like yourself…

The overall compensation plan is pretty darn confusing, and you can read it here if you want to, but I’ll try to break it down for you so that it is more easy to understand.

Friendship Bonuses

With these bonuses you can earn a 0.5% direct friendship bonus and indirect friendship bonus. These bonuses are paid based on the amount of cashback your personal recruits (direct friends) earn and the cashback that their recruits (indirect friends) earn.

So if you recruit someone in and they buy something to earn cashback, you earn 0.5% of that. And if they recruit someone in that earns cashback you also earn 0.5% of that.

Loyalty Cash

After accumulating at least $75 in your loyalty account you have what is called an “accounting unit”.

The goal is to get at least 35 of these accounting units above and beneath you, which is something you will do by recruiting others into the program. After doing this you will be able to earn “loyalty cash” which is basically a cash bonus paid out based on the number of people you or your downline recruit in and the amount of money they accumulate in their loyalty accounts.

Of course its more complicated than that but this is the gist of it.

Loyalty Partner Bonus

Here you will be able to get 18.75% from direct recruits and 6.25% from indirect recruits. Again, this is just paid out on a 2 level structure just as the friendship bonuses. You earn from the people that you recruit in and the people that they recruit in.

Volume Commissions

These are commissions paid out based on volume…. its also all about recruitment here. The goal is to recruit more and more people in, increasing your team’s volume, and advancing up the ranks, or what they call “career levels”.

Pyramid Scheme?

Whether something is a pyramid scheme or not is not as straightforward as you might think. Just because a company has a recruitment based compensation plan like this does not mean that they are a pyramid scheme. Whether they are a pyramid scheme or not depends on how much they are relying on recruitment vs earning money from selling their products to the general public, which in this case would be their cashback service.

What one government considers a pyramid scheme another may not. And this is actually the case here. Lyoness was actually rolled a pyramid scheme in Norway but continues to operate lawfully throughout most of the world.

Why did Norway conclude this? Well its likely because of how over-inflated their promotional material is and how they have all these Lyoness marketers running around and pretty much misleading others to get them to join… which is the result of the incentive Lyoness has created to recruit other people in.

The committee that made this ruling in Norway (Lottery Authority) stated that Norwegian participants in Lyoness do not receive or consume goods, services or other benefits from the sales system that correspond to the value of what is paid when they pay for them. 

Thinking About Joining… Consider This First

There are 2 different types of people who are joining this place… normal members and promoters. I want to talk to promoters in particular here and let you know that mlm (multi-level marketing) structures like this that have a pyramid-like shape may bring about potential to earn good money but the reality is that very few people ever do.

I review mlm’s similar to this all the time, such as World Global Network & Visalus recently, and its always the same story when it comes to the income disclosure. Below is a screenshot I took of the official income disclosure from 2017…

As you can see, 97% of marketers have the average earnings of $72.14 for the entire year…. very few people make good money as a marketer here.

Final Thoughts

Personally I am not a fan of this place. Just like most mlm’s out there, they have a very confusing compensation plan that they try to make seem more lucrative than it really is. When I come across something like this I tend to avoid it because it tells me that they are not being as straightforward as they could be and are doing this for a reason.

To me this seems like a massively over-hyped opportunity that many people are actually losing money with rather than getting rewarded.

But remember… this is all just my opinion… and the opinion of Norway, but join if you want to.

And since you are looking for an income opportunity like this where you get to run your own business in a way, you might be interested in taking a look at how I make a living working online. The reason I say this is because I have talked to others who were looking into mlm business opportunities and decided to try out what I do. You can click the button below to learn about what I do, how it works and how beginners can get started.

Please leave any comments or questions below and I’ll get back to you soon 🙂

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