Is Lyoness a Scam? – A Very Controversial Pyramid Scheme?!
Welcome to my Lyoness review!
Chances are, one of your friends or relatives has just introduced to you this amazing opportunity called Lyoness (Or Cashback World) where you can get a discount or cashback for all of your shopping.
Not only that, you can even make money by sharing this awesome opportunity.
First of all, I must Congratulate you for taking your time to do your own research before buying into any "seemingly good" product or business opportunity.
That's the way to avoid scams and find the legitimate way to make money online!
I'm not associated with Lyoness in any form so you can expect an unbiased 3rd party review on this company.
Is this really a great opportunity? Or is Lyoness a scam?
Here's the truth...
Lyoness Review Summary
Product Name: Lyoness
Founder: Founded by Iwan J. Ackermann, Max Meienberg, Uwe Proch & Hubert Freidl in 2003
Product Type: Global Shopping Community with a MLM business model
Price: Free to join (For customers)
Best For: People who shop a lot and want to enjoy some cashback & bonuses while shopping
Summary: Lyoness provides a legit platform to connect shoppers and merchants and benefit both sides at the same time (I'll explain the concept in the full review below). You're at the right place to enjoy some cashback. But if you're here to make money, I'm sorry to say that this is not the right platform for you to make money.
Wanna Make Real Money Online?
What is Lyoness?
Some Background Info...
It has a self-proclaimed membership of more than 8 million.
And it is currently active in 47 countries, spread over six continents.
One ugly truth is that, Lyoness is suspected as being a pyramid scheme in several countries. (I'll discuss more in-depth details in a sec.)
Also, there are some things I need to clarify so that it's easier for you to understand the whole picture.
Lyoness is a registered trademark name for a group of globally distributed corporate structures.
What this means is that there are a number of different brands under Lyoness.
- Cashback World is their main brand & platform to connect shoppers and merchants. (and to offer cashback to shoppers of course)
- Lyconet is the brand where they handle all their network marketing activities
- Cashback Solutions is the place where merchants can sign up and join Lyoness
This is why when you search for "Lyoness" online, Cashback World shows up as shown below:
How Does Lyoness Work?
They are targeting 3 main groups of audience:
- Consumers who want save money with Lyoness while shopping
- Merchants who want to benefit from an international loyalty program
- Entrepreneurs who want to make money through their network marketing opportunity
For consumers, there are 2 ways for them to save money while shopping:
- Cashback - When shopping at a store which is a partner of Lyoness (both offline & online), you can enjoy a 1-5% cashback reward by using your Cashback Card
- Shopping points - With every purchase at partnered stores, you can collect shopping points which can be used to redeem cash bonus or discounts that Lyoness offers
On the other hand, small medium enterprises can join as merchants by paying an up-front fee to cover administration and equipment expenses, as well as 1-2 per cent per transaction.
For entrepreneurs who want to make money, I'll explain their network marketing opportunity in the next section below.
Before that, here's a full video explanation on how Lyoness work:
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Lyoness Product Line
Lyoness does not have any product because it's just a platform connecting customers and merchants.
The only "product" it has is the Cashback Card for you to collect your cashback and shopping points:
As for partnered merchants, they claimed that they have more than 90 merchants waiting for you...
My recommendation for you is to find out what are the merchants partnering with them and whether you are a regular consumer for some of them.
If not, you're just spending more unnecessary money for a very pitiful cashback.
How to Make Money with Lyoness/Lyconet?
Lyoness Compensation Plan (Lyconet Marketing Program)
Lyoness' network marketing business model is pretty unique. It's very different from the common MLMs we know because Lyoness doesn't have any products to offer.
What you'll be doing is simply recommending Lyoness to your friends and family members as a way to help them save money on their purchases.
You won't earn any money when you successfully "recruit" someone into Lyoness under you.
Instead, you'll only receive an 0.5% commission from the purchases made by your referrals and another 0.5% made by your referral's referral.
This is know an their "Friendship Bonus".
Since they don't have any real products to offer and the only way for you to make money is by "recruiting" people, that's exactly why a lot of people or even countries call them a pyramid scheme.
So, is Lyoness a pyramid scheme?
I'll discuss that and tell you the answer real quick. But let's first take a look at a video explanation of their compensation plan:
Lyoness Ugly Truths Revealed!
1. Recruit, Recruit, Recruit...
Like I've explained earlier on about their compensation plan, Lyoness doesn't have any real products to sell because they're just a middleman between consumers and merchants.
So the only way for you to make money with Lyoness is recruiting!
Although they will always tell you things like:
"If you love this Cashback, you can make more money by sharing or recommending this to your friends and family members..."
In essence, it's actually recruiting.
Don't believe me? Here's the proof...
This is a screenshot taken from their PDF guide for people getting started with Lyoness.
Just like many other MLM companies, you're required to come up with a list of people whom you think they'll be interested in this opportunity.
99.9% of the time, they're going to be your friends, family members, co-workers, neighbors, etc...
This is also proven in the screenshot above. They're recommending you to contact them and pitch them this opportunity.
I'm not saying sharing this Cashback opportunity with your friends is bad. It is actually good for them as they can save money.
But I'm explaining this from YOUR perspective as a person who wants to make money online.
This is definitely not a good opportunity for YOU to make money.
Need proofs? Check this out...
2. Extremely Low Earning Potential
The above screenshot is Lyoness' Income Disclosure for the year 2017.
Here are the important details you need to know:
- 43% of all Lyoness Marketers received NO income
- For the remaining 57% who did earn an income, 97% of them earned an average of $72.14 (For the entire 2017)
- Another 2% earned an average of $2,048.10 (Equivalent to around $170/month)
Can you see that less than 0.1% of ALL Lyoness Marketers are earning a sustainable income?
From this stats, I can tell you that if you want to make money with Lyoness, I guarantee you 99.99% that you can't even pay your bills with that.
3. Pyramid Scheme in Disguise
Since Lyoness doesn't have any real product and the only way to make money (apart from the cashback) is by recruiting people, that's why it's very controversial if Lyoness is a pyramid scheme.
Here's the truth...
Lyoness is suspected to be a pyramid scheme in several of the countries it operates in.
In its homeland Austria, Lyoness has been declared a pyramid scheme by four independent civil courts.
Criminal investigations have also been concluded by the Austrian Economic and Corruption Prosecutor ("WKStA"), who maintains that Lyoness operates an illegal pyramid scheme.
Other countries that suspect Lyoness to be a pyramid scheme include Sweden, Poland, France, Hungary, Lithuania and Greece.
And Lyoness is already banned in Norway as the Lottery Authority has confirmed it to be an illegal pyramid-based sales system.
However, things are much more complicated than that my friend...
After further investigation, the Federal Court actually confirmed that Lyoness is NOT a pyramid scheme (Source: ACCC)
Here's my guess:
Due to all the complaints and lawsuits against Lyoness, they actually shift all the network marketing activities under the Lyconet brand.
And, they've also changed their rules and regulations. There used to be a fee for you to join Lyoness. However, currently it's Free to join them and enjoy cashback as consumers.
After all these changes, the Federal Court simply can't call Lyoness a pyramid scheme anymore.
But it still remains to be a very controversial company that you shouldn't waste your time on.
4. Lack of Training
Most traditional MLM companies has its own training and education to help people get started with their business.
But what do you expect from a shopping community company? Do you think they'll offer you a proper training on how to get leads and run a network marketing business?
Of course not!
Let take Uber as an example...
Uber also has its referral program where you can get a discount when you share Uber to your friends & family members.
But does Uber teach you how to get leads things like that?
Of course not!
The most important question is that would you even expect yourself to make money by recommending Uber to others?
To be honest, this concept is similar to what Lyoness offers.
What's Good About Lyoness?
1. Great Connection Between Merchants & Customers
If we put the network marketing part of this business aside, the cashback system is actually pretty good for both consumers and merchants.
Consumers can save money with the help of Lyoness while merchants can have more loyal customers through Lyoness.
Without the network marketing part, Lyoness itself is actually a legit system running on a pretty unique model.
Is Lyoness a Scam?
No, Lyoness is NOT a scam.
Like I've said, it's a legit shopping community with real cashback system to help consumers save money and help merchants increase sales.
It's not a pyramid scheme either because they have separate that part of the business to Lyconet. And it's now free to join Lyoness.
If you simply want to save some money from your purchases, you can look into Lyoness and see what are the partnering companies.
However, if you want to make money, this is definitely not the place for you as I've prove it to you using their income disclosure statement.
Less than 0.1% of the people are making a sustainable income with Lyoness.
How I Make a Living Online...
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The reason is simple...
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In fact, with affiliate marketing...
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