The Internet Marketing Scam Scam

The Internet Marketing Scam ScamMany years back, unscrupulous Internet Marketers discovered a way to build their business by discrediting their competitors. It’s quite a simple strategy:

  1. Register at self-appointed “watch dog” websites, which are often forums
  2. Start posting negative opinions, whether believed as true or not, as if they were facts

A person is presented with the Lyoness opportunity and they wisely decide to conduct their own due diligence, to see if the opportunity is real. They open up their web browser and user their favorite search engine, like Google, and search for “Lyoness scam” and back come, as of this writing, 26,700 results. To someone not versed in how the “The Internet Marketing Scam Scam” works, this seems like a large number. Actually, even if the number were 100,000 or 1,000,000, it would be relatively low. Here are some comparative searches:

  • Microsoft scam = 29,700,000 results
  • Apple scam = 31,600,000 results
  • Amazon.com scam = 38,100,000 results
  • Facebook scam = 88,200,000 results
  • Google scam = 90,200,000 results

Now, obviously all of the search results above are not describing the respective companies as scams. My point is that the presence of a large number of results for a given search, like “Lyoness scam,” means nothing. One has to meticulously research the results and look at the evidence to separate fact from opinion.

Fact vs. Opinion

Fact: A fact is something that is true about a subject and can be tested or proven.

Opinion: An opinion is what someone thinks about that subject.

Evidence: The available body of facts or information indicating whether an opinion is true or valid.

A Sampling of Forum Postings

Following are specific examples of forums that contain discussions—many of them quite long—about the Lyoness opportunity. If you choose to peruse this content, I encourage you to note:

  • How opinions are stated as facts without citing evidence
  • Once something is published on the web—or printed on paper—it’s assumed to be authoritative
  • Other sources of opinion masquerading as fact are then quoted as if they were evidence
  • Nearly all of the people posting do so anonymously
  • The net effect is that doubt is introduced, creating fear

A sample list:

Experiences with Lyoness? Scam?

Lyoness being sued by former employee for allegedly operating pyramid-style business

Lyoness warning

Lyoness anyone heard of them ?

lyoness cashback card/scam?

There are many more, but the above are enough to introduce you to this Internet Marketing technique.

I have first-hand knowledge from a consulting client whose business was defamed by a forum such as those listed above (but not included in the list above) that the forum owners tried to extort money from him in order to remove the false complaints. I have no evidence that any of the above-listed forums engage in similar practices.

Challenging Some of the Opinions

I’ll now challenge some of the misleading information in the above-listed forum posts:

Opinion: The Lyoness compensation plan is complicated.

Fact: Lyoness business members can earn income ten ways. The plan is comprehensive, not complicated. It was explained clearly to me in a thorough 1-1/2 hour presentation. I had a few follow up questions, which were answered to my satisfaction.

Opinion: Lyoness is in trouble.

Fact: There is absolutely no evidence that Lyoness is experiencing legal, financial, or other difficulties beyond those encountered in the day-to-day operations of any other company of Lyoness’ size.

Opinion: Business members “invest” in Lyoness.

Fact: It is free to become a Lyoness member. Business members can make a gift card down payment on future shopping. This is not a membership fee of any kind. The money is a commitment to shop and credited to the member when in the future they shop. I found the Lyoness presentation of the video to be transparent and clear.

Opinion: Lyoness is a new or “fly by night” company.

Fact: Lyoness has been in business since 2003 in Europe, are currently operating in 40 countries, have 2-1/2 million members (with 47,000 members per week worldwide joining), offer the largest shopping community in the world, are a certified ISO 9001 business operation, are audited by the prestigious audited by TUV Rheinland firm, are engaged in two comprehensive philanthropic initiatives, and now employ 800+ staff worldwide. Most convincing in my own research are the thousands of large corporations who have each conducted their own due diligence into Lyoness, names like Apple Computer, Wal-Mart, Macy’s, Panasonic, Foot Locker, Budget-A-Car, Barnes & Noble, Old Navy, etc. In a large corporation, one’s professional reputation and career success are based on the decisions you make. In each of the thousands of companies who are working with Lyoness, their management and legal teams have signed off on the decision completing their due diligence.

I will address additional misrepresentations below.

Controversy Creates Traffic

You may remember your early school days when someone yelled, “Fight!” Fights draw crowds. Sites the foster arguments, whether over politics, religion, money, or any of the other “hot buttons” in society, create traffic. Many websites employ the advertising business model, so the more traffic they receive, the more money they make. There’s nothing inherently unethical about this strategy, but it can be used in very negative ways. An example would be an untrue “attack ad” in the political arena. Negative ads work, since controversy riles people up, gets them talking, and can mobilize people to vote.

You’ll note that many of the forum “threads” mentioned above are quite long. The more people argue, the more content they generate for the website owners. Page after page is created, generating more and more traffic. And even if a website does not display advertising, when it comes time to sell that site, the more pages and traffic there are, the higher price they’ll be able to negotiate.

Legitimate Help with Scams

Not all forums, blogs, and websites operate with the strategy to mislead. Some operate with the purpose of providing helpful information. However, if you research such sites, you will still discover nearly all of the content is opinion. For example, a self-appointed “watchdog”, Rod Cook, published on February 14th, 2012 a negative article about Lyoness that has subsequently been removed and replaced with: “I have some really good WatchDog “Deputies” Who zeroed in on very ‘flashy’ newly launching (in the U.S.) as an MLM. They report that they are now in compliance with all U.S. laws. There have been no authorities charging illegal activity in checking Europe and Austria where they have been operating.”

The problem is that many other websites and blogs republished Mr. Cook’s report as if it were factual, fostering the illusion they were citing evidence, and many have not updated their content with the retraction.

If you would like to conduct legitimate due diligence on Lyoness or any other company, I recommend you contact the appropriate government offices. For example, if you live in the United States, you can contact the Attorney General of your state and inquiry about consumer complaints, and the Federal Trade Commission at http://ftc.gov. If you do not reside in the U.S., hopefully your country provides similar consumer protections.

Complaint and Review Sites

Besides discussion forums, there are many other types of websites on the Internet where one can publish information. For the website owners, this strategy is called “user-generated content,” which means that the information is created by others. This is a legitimate method of operating a website and is how much Internet content is created, including Facebook and Google+ updates, reviews at Amazon.com, and literally millions of other examples.

Here’s an example of a site where users can generate content about things they consider to be “scams”:

Lyoness Complaint 90798 Details

I have reviewed the Lyoness business model in-depth and count no less than five factual inaccuracies in this post. But note that because the information is published on a website, there’s an unconscious tendency for many to consider the information as valid.

Here’s a person claiming to be an attorney who made AU$36 supposedly conducting due diligence for a person inquiring about Lyoness:

Is Lyoness a scam??

The verdict of LegalPro54 “after a very thorough review” contains many inaccuracies, some of which I will now challenge below:

LegalPro54 Opinion: “…this company is likely operating a multilevel/pyramid marketing scam…”

Fact: Lyoness was founded in Austria and is maintains their headquarters there. Pyramid schemes are illegal in Austria, just as they are in the U.S. and many other countries. Lyoness was founded in 2003 and no country has ever filed a complaint that it is a pyramid or Ponzi scheme. When Lyoness America was founded in the U.S. on July 2nd, 2009, they did not start marketing memberships. Instead, they opened an office in New York in the Empire State Building and spent the next 1-1/2 years researching the business law in all U.S. states and provinces in Canada to ensure their program was 100% in compliance with all country and state/province laws.

LegalPro54 Opinion: “…their domain registry indicates that the website was created in the country of Malta…”

Fact: Websites are created in countries across the globe and this has nothing to do with operating a legitimate business. Lyoness chose to registrar their U.S. operations in Delaware, just like many of the best businesses in the country.

LegalPro54 Opinion: “Anything that needs to be sold at a “seminar” should be immediately regarded as suspect.”

Fact: Lyoness is a recommendation business and is shared in many ways, including the web site, printed literature, personal meetings, informal group meetings, and seminars. There is nothing inherently illegitimate about people meeting and experiencing a business presentation.

LegalPro54 Opinion: “There appear to be a very large number of “shill” reviews for this company (reviews posted by company representative and not actual, satisfied customers). This is another huge concern.”

Fact: Providing testimonials is a common form of marketing. LegalPro54 possesses no evidence that any testimonials are not from actual satisfied members of the program.

LegalPro54 Opinion: “Here is a much more honest assessment of Lyoness: Lyoness cash back card system

Fact: This is an excellent example of citing opinion as fact, as I mentioned earlier in this post.

The result? The person who was interested in Lyoness now doubts the viability of the company, persuaded the company’s activities are fraudulent. Perhaps investing some work, over time, Lyoness may have been a good opportunity for this person. Now they are left with only fear of getting scammed.

Summary

Accusing a company of being a scam without sufficient evidence is itself a scam. On the Internet, controversy creates attention and free user-generated content (e.g. blog and forum posts), which generates visitor traffic from search engines that can be monetized.

What’s Your Viewpoint?

I welcome your comments, pro or con, below.

Comments

  1. Now that’s what I call and informative, clear and factual post. I was directed here by a client looking at the Lyoness opportunity. This is a great place to send my potential leads to before they start believing everything they read on this wonderful program.

    • Thank you for your kind comment, Marie. This blog is new, but I have received some additional questions that I am currently researching. I plan to answer these questions post haste. If you or any of your members wish me conduct research, it would truly be my pleasure, as this type of effort spices up my retirement.

  2. Thank you for a very interesting contribution – your idea of adding the word “scam” to your website was brilliant; I would not have found it otherwise!
    Reading through many forums on the Lyoness programme I noticed how the most numerous “contributions” on each thread came from those most convinced of their beliefs but without a shred of actual evidence to back up these beliefs: i.e. OPINION!
    Keep up the good work, enjoy your “retirement”.

    • Liam, I am happy you have been able to discern the difference between fact and opinion in the many forum posts. One never knows the intentions of the writers, but my guess is that some, perhaps many, have been scammed in the past. Thus, new companies are “guilty until proven innocent”. We all know many scams do exist, but I currently have no evidence that Lyoness is one of them. Just the opposite, actually.

  3. Jeanette, you cite some great reasons that all these “scam” sites exist. Let’s also remember that the innovation of the Lyoness business model is so refreshing that it is attracting people from other companies in the home-based industry. Leaders (and corporate executives) from those companies have a vested interest in keeping their people where they are, and, unfortunately, many will stoop to very unsavory tactics to defame Lyoness in the eyes of potential members.

    One of the most important lessons I learned in school is to ALWAYS consider the source. If the source of the information is unclear or anonymous, that should tell you something right there.

    • Yes, always consider the source. Well said, Lane.

  4. This is great. A much needed post.

    But to get specific perhaps you can fully breakdown the purpose of a down payment in Lyoness OTHER than to earn greater profit. It is called a “down payment on future shopping”. But that’s instantly confusing to an average consumer looking at Lyoness. And when you get down to the nitty gritty…

    It appears that Lyoness members have the “option” to simply do nothing more but make down payments and earn from others down payments — making it “appear” as a money game, with no relatable sense to “shopping”:.

    For example: Do you get a greater discount on shopping when you make a Down payment?

    Again. What is the purpose of making a Down payment “on future shopping” other than greater earning potential.

    I like Lyoness. I have heard so many great things about them and what they stand for. I think this would be great even without down payments.

    I think once this Terminoloy gets fully addressed (or even changed) in a way in which ANYONE can understand the down payments purpose, it will literally exterminate 99% of all these ‘scam’ ponzi posts.

    • Ronda, it seems to me that the topic of gift card down payments has been the “sticky wicket” for business members to clearly explain. Have you had a chance to read GENERAL TERMS AND CONDITIONS FOR LYONESS MEMBERS (MEMBERSHIP AGREEMENT)? Skip down to section 5.4. There are a couple of examples that illustrate how this part of the program works.

      In my mind, it is simply like placing a non-refundable layaway on a product I wish to purchase in the future. Gift card down payments are a commitment to shop. One can “top off” the down payment themselves, but my understanding is that this is rare. Instead, members recommend other members and recover their down payments by earning Loyalty Credits. With the recently revised GTC’s, once a member shops they are eligible to make down payments. I have no way of knowing, but perhaps Lyoness’ legal counsel paired partially paid gift card orders with fully paid orders in order to operate legally in the United States.

      It seems to me that gift card down payments are a legal/compliant way for Lyoness to jumpstart their program in new countries. The method *does* allow more money to be placed into the accounting system/program by creating new units, and commissions are earned. I have heard, but have not been able to verify in the Lyoness official literature, that when a member makes a giftcard down payment, Lyoness buys from the selected merchant the complete gift card order (the down payment + top off amount). It has been stated that *all* commissions are derived from merchants, so this strategy would seem logical to me.

      • Hi Jeanette,

        Here is an article that has been floating around since May, which raises concerns about the accounting units. I can see some very fundamental errors in this author’s analysis. Since you mentioned it might be time to create a new post, I thought this article might serve as good source material. Plus, there are over 600 responses over there, so it could generate some toyota traffic if you post your response article as a link there.

        Here is the article: http://behindmlm.com/companies/lyoness-us-review-cashback-and-investment-returns/

        • Lane, covering that web site article may be warranted. Thank you for the suggestion. A while back, I did post a comment to that thread, and as expected given my perception of the forum and participants, the replies were more about “being right” than discussing points in a civil manner. You will find my post here — search for #401. I perceive only one legitimate question for Lyoness in the Behind MLM debate: When a member makes a partial gift card order, does Lyoness actually buy those gift cards from the merchant? If so, there is no issue. If not, it would be in Lyoness’ best interest to fully explain the internal financial mechanics of their compensation plan, as I do not see this issue going away, especially in the USA where there have been so many MLM scams in the past. As Lyoness business members, the presence of unresolved articles like this makes your marketing efforts more difficult. It is now my personal opinion — as someone is not a Lyoness member (not available in my country) — that Lyoness attorneys should officially address this question via presentation of fact.

  5. Hi,

    Very nice read, I am going to bookmark this for some potential Lyoness members.

    I am currently leaving feedback on behindmlm.com. The author (OZ) makes 1 valid point. Oz ignores everything about the system except the ability to recruit premium member (3000.00 down payment). because you get people to make down payments and that is all you have to do to make money it is considered a Ponzi scheme. What would your comment on this be.

    Thank you
    Carlo

    • Thank you for alerting me to behindmlm.com, Carlo. When time allows, I will investigate that website (I just took a quick look and there are many Google ads on the site, which may be their business model; more traffic = more ad impressions = more clicks = more money; creating controversy is a proven traffic >> money making model). Please see my earlier comment about partially paid and fully paid gift card orders.

  6. Great information!

    “Thank you for the candid expose’ of the “dark side” naysayers..pretending to be internet forecasters… who apparently have nothing more productive to do with their time than squander reality…with their dribble and nonsensical untruthful observations… totally devoid of any truth”…

    Terry Debay, a Premium Lyoness Member! and delighted and honored to be one!

    • Terry, do you remember how the Wizard of Oz acted while behind the curtain? And how differently he behaved when exposed? My first test when I wade into the murky waters of forum posts, and even blog comments like these, is: “Is a real person standing behind their comments?” With the veil of anonymity hiding a poster’s true identity, often the shadow to which you refer brings out their worst. Just look at how uncivil YouTube comments have become. It is like all of the commenters are still in their early teen years. Is it not more useful to seek facts and let the chips fall where they may? I believe Lyoness deserves a fair shake, and I will report on both the pros and cons as I see them.

  7. Thank you so much for posting this info. I have been a Premium Member with Lyoness for just over a year and I can definitely say they are an amazing company that does good for the whole planet and all who inhabit it! Also a portion of every purchase goes to Child and Family foundation which Nelson Mandela just became Ambassador! Just another extremely proud day within Lyoness!

    • Thank you for your comment, Leslie. I must say the majority of Lyoness members with whom I have corresponded express sentiments similar to yours. Not all, but most. I see this as a good, healthy sign. I wish you good success in your efforts.

  8. I appreciate your diligent research and ability to disseminate that info. I definitely concur with all of your assessments of the Lyoness company. One thing not mentioned thus far is how Lyoness is presented to potential members. It is relationship driven, meaning I will refer the opportunity to those that I know personally, they view the opportunity in the context of the trust they have for me based upon our relationship. I enrolled because I trusted the person who referred me to the Lyoness opportunity. I truly am satisfied with the way Lyoness does business. It really only takes 4-5 like minded individuals for your business to be a success as there are no autoships, no specific product to buy, resulting in virtually no attrition as nearly everyone needs to buy food, clothing, and gas on a regular basis. As a professional I see this business as a great retirement vehicle.

    • Dr. Mall, you make a useful point that Lyoness is a business that is best recommended person to person, and that trust is a key factor. My concern and part of my impetus in dedicating time and energy to this website endeavor to help dispel false claims that can, unfortunately, erode earned trust.

  9. We must all realize our world has many who feel spreading negativity is best but we can look at our political arena and see what is happening there. So many negative commercials about all the candidates which leaves us all wondering what is true and not true. Who is best to fill the position and who’s not. Unfortunately this makes us feel no one, with all the bad track record is really capable, yet one of them will definitely get elected. Ironic isn’t it because most will vote anyway. With Lyoness, we have those who doubt and perhaps nothing will change their opinion and this will be their loss. For us who see Lyoness for what it really is will benefit and show other how they can benefit one by one. With my background I believe in doing my homework on any endeavor and find Lyoness’s plan genius. Lyoness is giving many an opportunity to enrich there future and most importantly help children around the world and saving the planet for those children in their futures. I am proud and thankful to be a Lyoness Member!
    Thank you Lyoness for sharing and giving…

    • Winnifred, I am happy that you have brought out this important point of negativity. In addition to political wrangling, we frequently see this tactic used in courtrooms. If a witness can be discredited through innuendo, their testimony may be devalued in a juror’s mind. Even if opposing council objects and the objection is sustained, the poison of negativity has been injected.

  10. Is there anyway these people can be held for “liable” or slander?

    • @Bryan, I’m not trained as an attorney, but my understanding is that slander is both difficult to prove and expensive to litigate in many jurisdictions. By the strict definition of the word, though, many are slandering Lyoness, making emotionally-based accusations that are not based on verifiable facts.

  11. Very satisfactory company.

  12. Fantastic you taking the time to offer people a true picture of this business that not only gives it’s members a wonderful opportunity but helps children around the world with their edcation through it’s charity. I am a member of Lyoness and proud it too as I know my shopping helps somebody else.

  13. At last, positive feedback about the company that is going to drive the world economy, and make this world of ours a much better place.
    We thank you Jeanette for your neutral point of view, putting the facts on the table, and actually giving people that may be looking at negative blogs, the opportunity to get involved in the most amazing opportunity of their lives.
    I’m a Premium Member and Team Leader in Australia, and I’m sending your link to 700 members in my team.
    Everyday us members find out that the company is bigger than we can ever imagine, and those visionaries who get involved will benefit not only for themselves and their families, but for the vision of the company and their foundations.

    I am so excited to be a part of the Lyoness community, and I look forward to helping people achieve their dreams and goals….!!!!

    Health & Happiness,

    Daniel Doyle

    • @Daniel, thank you for your acknowledgment and best of luck with your business efforts. If you or anyone in your group would like me to look into anything in particular, please let me know. It’s time I published another research post.

  14. Hey guys,

    I’m from Austria, and there is currently a lawsuite against lyoness here.
    Anothing thing here is: Did you ever try to calculate what the sum of the payouts is they are promising?
    It seems that this won’t work out ….

  15. Hi Jeanette, I am a Business Premium Member of Lyoness although not a very active one. I have been interested in the potential for Not For Profit organisations to primarily generate income streams from the Friendship Bonus elements of the Lyoness model ie their would members simply use Lyoness for day to day regular shopping getting small but useful cashback on their shopping whilst knowing that their Club/Charity was directly benefitting as direct and indirect introducers.

    I am being discouraged from developing this concept partly by Lyoness themselves who fear that the Club/Charities may get it all wrong, perhaps an understandable reaction but I think a little negative but the really difficult issue to overcome is when the local group who are the ones who actually would promote the shopping community concept have to submit the proposal to their “Head Office” who immediately undertake their “due diligence” which actually involves the simple search on Google which gives rise to all the negative, confusing posts and comments you have referred to. I would rather anticipate this by advising the Club/Charity officers how to undertake effective “due diligence” bearing in mind that these organisations are not peopled by lawyers. Your website and blog is extremely useful in this respect however would you be prepared to respond to a direct enquiry from an officer of a Registered UK Charity that we are dealing with?

    Kind regards, Mike

    • Mike, has anyone from Lyoness Corporate in your country discouraged you from working with not for profit organizations and focusing on shopping? If so, I would be surprised since it seems to me a focus on shopping is crucial for Lyoness’ long-term growth.

      Yes, non-professional, web-based due diligence on many businesses, products, services, etc. is thwarted by all of the disingenuous, self-serving information this clutters various websites. Unfortunately, much of this “noise” ranks well for various search engine keywords. True due diligence research is based on ascertaining facts.

  16. Pure and Simple stay away from Lyoness, I was promised a share in a phase 3 media campaign when they hit Aussie shores only to be told once here we never promised that.
    Also when getting a refund they pay you what ever they feel like there is a difference in each of the refunds given, they have pocketed a share of each of the down payments . you might be looking at anything from $40.00 to $60.00 AUD
    that soon adds up….. They also claimed to have loyalty partners example Woolthworths the only association with them was buying of gift cards YET they led us to believe that they were partners and we even placed units against their name…..Woolworths were aware of this and stopped supplying gift cards to them.
    All they are focused on is team building by pyramid and is very clever……. all the big companies associated with lyoness are not partners they only buy gift cards and vouchers through them and supply members please be aware of that …… STAY CLEAR they have had court cases in Europe and the same thing is going to happen in
    Australia. People are complaining everywhere here and are getting refunds

    • Bella, thank you for your message. The problem with your type of comment is that, without significant effort on my part, I have no way of validating your claims. I do hear that you are currently unhappy with Lyoness. Regarding merchant relationships, it appears to me there are three levels: 1.) An “affiliate program” type relationship where web browser cookies track sales; 2.) Gift cards, which does represent a much higher level of partnership; 3.) Implementing mobile shopping vouchers; 4.) Installing terminals in physical stores so that members can simply swipe their cards. As Lyoness enters new markets, they start with #1 and move as many merchants as possible toward #4. Regarding your claim of European court cases, please see this post.

    • Oh my goodness, Bella. The problem here is not with Lyoness but the fact that your reccommender has not given you the right information or you have not understood how Lyoness works. Phase 3 is nowhere near started in Australia. WE are still in phase 1!

      Everything you said about Woolworths and why they pulled out is just gossip. Not truth. They don’t give ‘refunds’ as you called it, they pay you cash back on your purchases through Lyoness (gift cards and online shopping). Their accounting system is regularly audited by one of the most respected companies in Austria. Unfortunately, this is why people are quick to throw up bad reviews as they are not trained properly and have NO understanding of how Lyoness works.

      This is bound to happen when you have representatives recommending the wrong people into it.

      Lyoness is the world’s largest shopping community that happens to have a referral program.

      That about sums it up.

    • Hi there,
      I am in Melbourne, Australia, and today got talking to someone in the scheme and was invited to an evening tonight in Port Melbourne. I cannot attend due to a commitment so find myself here going through this site and am thankful to see another Aussie! So far, I have read very positive comments but they all seem to be in the USA. Can you let me know more of what you found and reasons why you are not happy, would appreciate that. Also, do we get the option of putting money in as has been suggested in previous?
      Thanks in advance, Ingrid.

  17. Hello! I am writing to you with Polish. Browse various websites on Lyoness and come to a conclusion. Everywhere repeated negative opinions of Lyoness caused by envious people who misunderstood there is such a simple way to make money. Moreover, it seems that the main force Lyoness control rate in the world are banks who see danger in the fact that customers Lyoness taking out money from banks invest them in withholding purchases. And this is the biggest PROBLEM!

  18. Hello Jeanette,

    That point you made above: “Controversy Creates Traffic” you made above was worth GOLD. So thank-you for that contribution.

    (It at the very least makes people stop and THINK about the “motive” behind these other “forums” These forums are certainly not going through all this negative debate for their “health” or because they “care” so much about you. They often are very rude and antagonistic to Lyoness supporters as well, to further create conflict. It’s quite slick. Unfortunately, they can also “control” the responses. It’s simply not a creditable point of reference. I also find it hilarious that one can border around SO much slander, and exercise SO much scrutiny, but remain “anonymous” and convince others that who he (or she) is irrelevant. (you got to be kidding me) Sorry, but your Identity, may further clue one in on your motives, and those motives are VERY RELEVANT.

    With that being said… it is however very difficult for the average lyoness user to perform due diligence as the lyoness AU system is so complex. The “purpose” of down payments are also very fuzzy at glance.

    As for Lyoness being a “Shopping Program” …

    Prospective members are told to join Lyoness to get cash back without changing their ‘normal’ buying habits.

    I have noticed that Lyoness is doing well oversea’s. In the US they have growing merchants. However, I have heard it mentioned that you can not swipe your cash back card ‘physically’ *yet* in alot of the everyday common merchants: (Walmart, Kmart, CVS, Safeway, Exxon Mobile, etc) I’m wondering why that is. Especially since Lyoness has been in the US since 2010. It would be easier to promote the program without the main focus being on massive “down payments” which make little sense.

    And YES Lyoness’ attorney should address some of these questions in regards to the AU comp plan, downpayments, etc and it’s “pyramid-like” structure. The basic .5% commission is perfect. In my opinion it is Lyoness’ biggest drawback with the exception of a program with limitless potential and trackrecord. But they have not.

    • Ralph, thank you for your comments. Regarding your question of Lyoness terminals not yet being installed in major merchant locations, Lyoness needs more members before the merchants can justify the investment in equipment, training, support, etc. For example, as of today, Walmart has 3,892 stores in the U.S. alone. Once the Lyoness membership is large enough, just like in other “fully developed” countries like Austria, members will be able to swipe their card. Thus, Lyoness begins with online and gift card merchant programs as the build out a given country.

  19. Hi Jeanette & Bella,

    I am at the forefront of what is happening with the business here in Australia. What you are saying, Bella, is not factual, and I am happy to provide answers for you through this blog.
    The growth and excitement here in Australia is overwhelming and the SME (small merchant) program is rolling out as we speak. Next month we can start swiping our cash back cards in small to medium businesses, and Lyoness is now affiliated with one of the biggest key accounts in the country, which was announced this month. We can now buy almost anything in Australia and receive our cashback and member benefits.
    There are only a handful of people here who are disgruntled. They are people who haven’t the drive to succeed, so the only alternative for these people is to try and spoil it for everyone else. Nothing is going to stop this wonderful company from going viral throughout Australia, Asia, and the rest of the world. They are a legitimate company that is going to change the world, making it a much better place.
    For those who want to join this amazing company, Jeanette is doing an amazing job with this site. Do your big brother due diligence with government bodies, not your little sister due diligence with Google results from people that are not successful within this business, and have the mentality to tell the world that they are not happy, to try and discredit a company that’s building schools all around he world for underpriverlidged children, because they can’t succeed.
    We have our hands on the next big thing. Not just a shopping community, but an extraordinary shopping community. There is nothing about this business that shows that it is a Ponzi or pyramid scheme, and if anybody thinks it is, well, don’t get involved, because you don’t understand the business, and maybe you don’t deserve the benefits that we are all more than happy with.

    Health & Happiness,

    Daniel Doyle

  20. Awesome website and informative posts. I am currently considering joining lyoness as a business partner member (gift card buy in) but only hesitant because of the time commitment. I initially though this was a scam or pyramid scheme but due diligence proved otherwise. Based on all the company information reviewed so far from a very active member who is earning $1,500 a month and growing monthly here’s the bottom line: you can only make that big pot of money promised by getting other gift card members to join and those individuals branching out and getting people to shop, shop, shop…consumerism at it’s best. Now about the active member I mentioned above, he has about 60 of those gift card purchasing folks (each paid about $3,000) and each of those folks branched out making the total hierarchy around 1000 folks and counting/growing….based on that groups purchasing amount, bonuses and payments are handle down. The interesting thing is that the sub business members in the sub category base on their groups’ performance can and are making more than him…about $5-7k per month (3 of the 60 fall into this category). Again lyoness is not a scam but if you are willing to committ time, effort and be that annoying person who persist that this is the best thing ever than you can make a crap load of money. BTW there are 8 levels of earning and based on how many people you pull in and how effective they are in spending money, you can climb up the ladder quickly. FYI people above level 5 make too much money in my opinion…money doesn’t buy you happiness. The intent of this post is not to sell you the company but to give you factual data on the basic question of how does it work from a non member who has done proper research.

  21. not a scam but full of brainwashed nitwits that think this is “passive” income and will help the world.
    if you have a family member or friend that is in this they will talk your head off, if you dont join they wont be associated with you. True story.

    • Lyonessbrainwasher,

      It is clear that someone has a skewed misunderstanding of the opportunity Lyoness offers. Passive income is often interpreted as something you don’t have to work for, which, unfortunately, attracts people looking for something easy.

      The reality is that it takes a LOT of hard work and some luck (interpret “luck” however you like) to build an organization of shoppers who will generate a sufficient sustainable income for you through the compensation plan.

      Regarding Lyoness helping the world, I can point to evidence that they already are, through their child and family foundation. There is also evidence that Lyoness is helping to revitalize economies on a growing scale, as testimonials from happy merchants are being reported from around the world.

      I have let friends and family members know about Lyoness, and some have decided to become members, while others have not. I still associate with all of them. I cannot speak to the relationship between you and the person who introduced Lyoness to you. I can say that if someone was calling me a nitwit for being a part of Lyoness, though, I would certainly take offense, and might choose not to associate with that person, either.

      The double-edged sword of a business model like this is that there is no barrier to entry. Anyone can participate, regardless of their background or qualifications. That leaves the door open for some people to say and do the wrong things.

      Fortunately, Lyoness does have the ability to terminate a member if they violate the GTC’s (General Terms and Conditions). Too bad there is not a similar policy in place in this comments section.

  22. To Jeanette Hayworth and Bloggers,

    I just wanted to wish you all the best for Xmas and the New Year to you and your families.
    Lyoness has a member projection of 10-20 million by the end of 2013. Our goal in Australia is to be the biggest SME country in the world by then, but with us all working together around the world, Lyoness’ growth is going to be enormous in every country. Looking forward to the next chapter in my life with this great company, and the 10th birthday of Lyoness on the 2nd of July 2013.

    God Bless, stay safe,

    Daniel Doyle

  23. My wife and I are both Premium Lyoness Members, and we can see the long term picture.
    I can see a strong reason for the opposition we are seeing to the Lyoness model. Simply, the loyalty program will dictate that about 50% of businesses won’t be able to join. These businesses may then seek “revenge”.
    In Australia, this year, we’ve seen a very aggressive TV campaign for loyalty cards by Coles, when Lyoness was reselling Woolies gift cards.
    The only “criticism” I could make about Lyoness, is the need to commit to purchasing through Lyoness , AU$300 of gift cards but from some 12 only companies.
    I am predicting that this will change with SMEs joining, but through my work in the community, I know a large number of people who already understand the Lyoness concept but do not have the economic capacity to commit to $300 of products that they cannot warrant purchasing, whilst other cards, which they could utilize, do not allow this qualification.
    We have already benifited through Lyoness, and shall continue to quietly promote this endevour.

  24. Lyoness is going to become a household name in 1-2 years and there is no way someone stopping this.

    Period.

  25. Hi Ross,

    Just need to clarify that if a shopper is registered, as they are for free, they only need to make an online purchase to activate their account. The purchase could be for $1 online, and as long as this purchase is made within 30 days (the free 30 day trial period), their card is fully activated for life. The $300 purchase for vouchers, is only when you do a down payment. It’s a shopping community, we can’t be expected to do a down payment without shopping. That wouldn’t be a fair system.

    Happy Shopping,

    Daniel Doyle

  26. I’m in Stockholm, Sweden, where Lyoness is really just getting underway. I joined in December, and am just on the verge of getting a Premium Membership. Of course I have started searching around to find out as much as I can, and am thrilled to have found this site. Lots of wonderful information, and I see many of my questions being answered. One of the attitudes I have encountered at the two meetings I have been to so far is the old “if someone is winning, someone else must be losing” point of view. In this case, that does not appear to be the situation. As far as I can figure out, the only potential losers are advertising companies.

    • From my perspective, the merchants, to whom I believe you are referring to as advertisers, are also winning. A wise merchant who is considering joining Lyoness simply needs to: 1.) Clearly understand their profit margin: 2.) Also understand the lifetime value of acquiring a new customer. Once they have this information, paying Lyoness an appropriate (to their business model) commission on sales can be very profitable for them. In addition, merchants who understand “the big picture” realize that when they sign up a new Lyoness shopper, they will not only earn from sales in their store, but earn whenever and wherever the member shops. Smart merchants who get involved early can see Lyoness become a major profit center within their business.

      • Actually I was referring to the advertising business. The way Lyoness was presented to me was that Lyoness introduces a loyal customer basis to a business, thereby reducing the business’s need to rely on external advertising, and actually saving them at least some of the money they spend on it. Therefore the only potential losers might be advertising agencies. Unless of course they became Lyoness merchants. ;-)

  27. I simply love those who call Lyoness a scam or a fraud because it’s those people who pay my commissions :-D
    How come? When I go to a store, restaurant or what ever and get my cashback, guess who pays it at the end?
    Answer: Those at the same store, restaurant or what ever who don’t get cashback i.e. non Lyoness members hahahahaha!
    Thank you! Without those people Lyoness wouldn’t work.

  28. Perhaps first of all I should say that I live in the UK and that certain conditions may apply here that are different in other parts of the world.

    Having been in Lyoness for around 18 months, attending a large number of presentations with some training added on, I have a reasonably good idea of its operation and business structure.

    As an experienced business person the reasons for me to join Lyoness is that it was 1. A well established company 2. Not an MLM business 3. Financially established 4. Had a potential for people to save money shopping and make money if they wanted to go that route.

    Up to nine months ago everything appeared fine and there was “talk” of a “major media launch campaign” that could or may take place in the “new year”. Our “upline” whispered that important changes were in hand to be announced at the September “Bash” in Austria. That came and went the only difference noticed was Lyoness changed “policy” with regard to recruitment instead of “by personal invitation only” anyone could sign up via the Lyoness website. In effect this not only works against individuals trying to build the business but also established retailers (SME’s) as their customers could bypass them in getting their card causing a loss of business potential. (I sent an email to London HQ about “one or two matters” but there was no reply). Up to Christmas I was able to talk to HQ staff via phone quite easily but since, it appears that calls are being pushed to e-mail only. I have tried three times to talk to the office via the phone without success, they have answered one mail out of the two sent.

    Training For Being an Official Presenter:

    Around October time a well known official trainer covering various areas was suddenly replaced with someone else. After six weeks he was stopped and to my knowledge, all training now has to be done “in London”. For those not living in the area it can and does prove very expensive to travel to London. A personal contact told me that at a meeting shortly after Christmas they were told that everything done in the way of training before Christmas did not count and would have to retrain in London. Unfortunately, he had been to London a few times prior to Christmas (£100 cost of travel each time) but was told that he would need to retrain?

    From personal experience and knowledge, I would advise that anyone who doesnt shop much value through each week look to buying where they can get more than 2% cash back. Unless of course you can build a “lifeline” (so that other people’s shopping can add to yours).

    Currently for me personally, there is a mystery about the direction Lyoness UK is going bearing in mind of course the economic climate Europe has. In my area there are key contacts I need to talk to but can’t be contacted. Lyoness has lost Tesco NI and recently ASDA UK (a very large player in the food industry). Having spoken to two higher level members over the last two days, one said he was putting Lyoness on the back burner until later. The other was more forthright and said “Lyoness keep moving the goal posts and couldn’t care less about their distributors” but was staying with Lyoness until he could see what was happening. I suspect like me he has some money tied up in units which have to be shopped through to benefit, otherwise they stay put in the system.

    As for me I’m not able to recommend Lyoness to anyone until something sensible comes out of London HQ. In concluding, I would not call Lyoness a scam as I think its business model has sound principles; However, its application to the UK market is another matter.

    • Just a small correction.
      Lyoness is in fact an MLM business, but not in the traditional way. Unlike traditional MLM businesses, Lyoness has no own products except some marketing-products, and of course the cashback card, but it has the MLM buildup where “normal” people can earn money by marketing, but not by selling.

      In Lyoness, you don’t have to sell in “new” products and make people change their shopping habits.
      It doesn’t matter that many MLM businesses has world class products like i.e. Amway (I really like and use their products), but you need to be a damn good salesman to convince common people about that.

      • Robert, to respectfully clarify; Lyoness is not an MLM and here are a few reasons why:
        – No Sign up fees: It is free to join as a member of the shopping community. As a Premium member I down-pay with a commitment to shop and as a result I get extra benefits. This is not a joining fee/investment. I can see exactly where my money is in my back-office and it will always remain my money. In response to those that say that I have to spend money after that. If you can show me a way that I don’t have to spend any money on food, petrol, services (ie: getting my hair cut, car serviced, taxes done), then please let me know. I have to spend this money anyway so I may as well get benefit myself, to the businesses I shop at and to the Lyoness charities.

        – No Business kits: With most MLM’s there is some kits/sample pack/etc that you need to purchase to get started. This is because a MLM in its definition has product to sell. As a Lyoness member I have no product nor kit. I just have many locations that I can shop at and benefit.

        – Monthly minimum: MLM’s generally require you to spend/invest a certain amount of money each month. Not with Lyoness. Let’s say I didn’t use any of the merchants through Lyoness for an entire month. I won’t be penalised by Lyoness (the company) in any way. I will be losing out by my own actions as I have missed out on cashback and loyalty units.

        – Auto ship; I don’t have X product shipped to me each and every month, even if I didn’t want it. As already mentioned, there is no product.

        – There are no website charges, no inflated commissions, no overpriced products. Attrition rate is extremely low because you don’t have to keep finding new members to ‘sell’ to because they keep dropping off; there is no selling. All money distributed by Lyoness comes from the merchant. My earnings are not diluted down/distributed to my recommender.

        – The main difference is the circular method of benefit. Example: my shopping units that I earn can benefit those that I have recommended or even the recommendees that I don’t know. My shopping units will naturally fall behind them. This not only benefits them, but ones who recommended them and so on. It also helps me. In an MLM the ‘downline’ generally does not benefit from the ‘upline’.

        To reply directly to your post: You mention that Lyoness doesn’t have any products apart from marketing products & the cashback card. I would generally suspect that ANY business would produce flyers/brochures to inform potential customers of their specific products as an information tool. This by no means is a MLM-specific practice.

        To be clear though, the friendship flyer has no products listed. The flyer displays a very small snapshot of merchants around the world and locally, but there is no product/prices listed. The flyer will explain how Lyoness started, the charities Lyoness supports, how the concept of the shopping community works and that person gets a temporary card to start using straight away to earn cashback and benefits. All free of course.

        – Normal people earn money by marketing. This would imply that if I was a cardholder and I didn’t “market” this to anyone else I wouldn’t get any benefit. Not true. If I was to never give the opportunity for my friends/family/others to never have to pay full price again (because of the cashback) and I just kept this to myself, when I go shopping I still get all the benefits. I get a very small percentage if I recommend it to others, but the card holder themselves always gets the lion’s share of benefits. The friendship benefit is limited to 2 levels and stops.

        I do know that in the USA because Lyoness doesn’t fit any box that already exists, they had to find something that looked close. Whilst for the few reasons that I’ve pointed out it isn’t an MLM, in the USA they had to register it as one just to satisfy the legislators.

        As with anything that doesn’t fit a box because it is unique, we tend to try and assimilate so that we can understand it.

        Blessings.

        • Michelle, as far as I understand by your reply you’re a leader in or representative of Lyoness. Please don’t misunderstand me, I’m a Lyoness member, will probably be a premium member soon and I think Lyoness is a fantastic opportunity, just what the business have been waiting for.

          However, I have a long experience of MLM (Multi Level Marketing), Network Marketing, Personal Marketing, there are many names for the same thing, and that’s just a mouth-to-mouth marketing concept that has turned up to a business.
          Actually, MLM, NwM or what ever, is generally what the business plan is called where “normal” people can get payed in levels to market a product, service or what ever. So MLM is not specified by:
          – Sign up fees.
          – Business kits.
          – Monthly minimums.
          – Auto ships.
          Or anything that you may find in some MLM-companies. MLM just tells that there is a way for people to earn money on a kind by friendship marketing.

          There are a number of different kind of MLM-business plans and the one Lyoness uses is called a “Binary system”.

          My guess is that the reason you protest against calling Lyoness MLM is that there sadly has been a number of unserious companies that has dragged the name MLM in the dirt, and that’s one of the main reasons why I mostly don’t use the name MLM, but Network Marketing or something else.

          However, I think it’s time to take the name back. Like e.g. North Korea is NO democracy despite that the countrys official name “Democratic Peoples Republic”, a MLM-business isn’t and will never be a pyramid scam, and a pyramid scam isn’t and will never be a MLM-business.

          So the conclusion is that Lyoness is in fact a MLM-business, but the smartest one yet :-)
          And the people who started this site and call it “Lyoness Scam Review” don’t even know what they’re talking about, period.

          Just one last thing.
          My quote: “Normal people earn money by marketing”.
          You said: “This would imply that if I was a cardholder and I didn’t “market” this to anyone else I wouldn’t get any benefit”.
          I’m sorry if you misunderstood me, but that’s not what I said. Of cource you’ll get benefits even if you don’t “market it”. You will save money and get cashback, but you won’t earn any money. Please note the difference :-)

          • Actually Roert, as far as I am aware Lyoness is only registered as an MLM in one country and that is the USA and that is only becuase of the laws pertaining to that country. Every other country Lyoness is registered as a shoppping community. Lyoness was founded in Austria where MLM is in fact illegal so there is no chance that it was in fact founded as an MLM.

          • Robert
            Firstly, I need to very clearly state that I am not a representative of Lyoness, I am a Premium Member and yes, I am a leader.

            Secondly: In summary to your rebuttal. A MLM, stripped down to the bare minimum, necessitates members to sell the MLM’s products. Unlike Amway, Melaleuca, Mary Kay, Avon and the like, there are no products. There is in fact nothing to sell. The concept is unique, there is no box and this seems difficult for many to fully comprehend.

            I congratulate you if you become a premium member as that would indicate that you ‘get it’. Those that are Premium Members are predominantly (though not limited to) visionary leaders. In saying that, there are Premium Members who have done not a great deal, they haven’t shopped and they haven’t treated this as a business. Whilst they may ‘get it’, they don’t have the drive to take charge… but we are now venturing into another area and is getting off topic.

            Robert, since you are a member of Amway, can you clarify that in order to become a member and to retain the benefits of membership; did you have to pay a sign up fee, purchase a starter kit, order a minimum amount each month/partake in an auto-ship option?

            I look forward to your reply on this.

            Finally, the purpose of this website is to invite participation and open discussion and to bring light to the facts. The domain is selected specifically so that it appears in searches. Wouldn’t you want to find an unbiased site about a topic that you were researching?

  29. Hi Terry
    As with any business, there are areas that require refinement and change. No business throws open its doors and can forsee the next 2+ years with everything that will happen, without making changes along the way. It is inevitable.

    I’m in Australia and I’m sure Lyoness didn’t anticipate the speed at which Australians took to this either. Each country is completely different. Whilst the business model and the strategic integration remains the same (so far in 42 countries and counting it has been hugely successful), the speed at which each country ‘rolls out’ differs. Lyoness has to take into account that country’s nuances.

    Merchants will come and go (we’ve seen that here as well) but doesn’t that happen anyway? Businesses come and go all the time (separate to Lyoness). I suspect that there is more to this story although the same question can be asked of a Lyoness or non-Lyoness merchant/business: Was their expectation reasonable and did they understand the bigger picture?

    As for travel: yes, I have to sometimes travel 2.5 hours to a Lyoness function. I see it as an opportunity rather than a negative, I get to see places that I may not normally. Whilst it takes time and granted, I run this as a business, expecting everything to be in my immediate backyard is unreasonable.

    These minor details do not stop me from continuing to share this with others, allowing them to achieve whatever goals they want. If a company that has been around for 10 years, continues to grow at the speed at which Lyoness is, you have to concur that they MUST be doing something right.

    I have total belief in Lyoness. I do not know of another business that I don’t have to sell anything, I am going to go shopping anyway and in doing so I help not only my local businesses (offline and online), a percentage of my shoping goes to 2 fantastic charities. Why not boost our local businesses and benefit as well? I love the sense of community that Lyoness brings.

    Don’t get bogged down on the minor details as all of these things just pass by. Keep focused on the bigger picture and it is so easy to just keep going.

    Blessings.

    • Michelle, I thoroughly enjoyed reading your measured and reasonable response.

      • Thank you Jeanette for your comment.

  30. Hi Jeanette

    I personally joined Lyoness because it is a complete no brainer…

    I was wondering if you could touch on this subject:

    I have noticed that some people looking at Lyoness dont see the value in joining right away due to the slight inconvenience of buying gift cards. I was wondering if you could talk a little bit about what happened in Europe regarding the explosion in membership when the major retailers started to accept the cash back card. I feel that some of the people looking at Lyoness are not seeing the true magnitude of what’s to come :)

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