Owners: Hubert Freidl
Bare Naked Scam rating: 3 Thumbs Down
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What is Lyoness and is it a Scam?
Lyoness is another Multi-level Marketing (MLM) company that is advertised as a business opportunity that has been making the round lately.
In this review, we’ll find out if Lyoness is a scam or if it’s a good legitimate opportunity that you can use to make some side-cash.
The company has been around for quite a long time, it was founded 2003 and it has undergone quite a few major changes since then.
It also resembles another company in the same MLM industry called Shopping Sherlock.
Currently, the company’s core product is a service called Cash Back which refunds a percentage of cash that is spent in their online stores.
They want you to believe that you can buy everything that you need from the company’s stores while receiving a little refund at the same time, in other words, saving cash.
Here’s how it works:
There’s only one problem with that picture, and we’ll get into it in the next section.
But first let’s talk about the compensation plan.
The Compensation Plan
The idea is to purchase a membership and then recruit new people to the company to receive extra bonuses.
The bonuses vary depending on the number of people you recruit but the most common type of bonus is simply reward points and these points can be spent in their stores. You’ll also need to pay to become a member and this can be quite expensive depending on the type of membership you choose.
In other words, the idea is to recruit new people so you can continue shopping with the company and encourage other people to do the same too. You’ll receive a bonus every time someone under you makes a payment or purchases something from the company.
When you reach the $75 threshold, you’ll receive one of the five different types of accounting units. This threshold can be reached after you recruit 35 people. The entire compensation plan is rather complex, and a full detailed breakdown can be found here.
And, here is a 20 plus minutes long video which explain how the compensation plan works. Only if you are serious about the Lyoness business, you should screen through the entire video:
To get account units, there are three methods: down-payment, become a founding member, or shop on a daily basis. The down payment is the most expensive but the quickest, you’ll have to pay somewhere between $300 and $3,000.
In my opinion, this business opportunity is really not worth the price because it’s far too complex and nobody even understands how it works. It’s a little too expensive and I have heard quite a few horror stories from people who claim they lost thousands of dollars on this company.
A word of caution, don’t buy anything until you know exactly what it is that you’re getting!
Cashback Royalty Card
The Cashback Royalty card works much like any other card, but you show it at Lyoness verified merchant’s cashiers, when you’re finished shopping. When you show the card, they’ll scan it, and reward you with cashback, usually around the 1% mark.
This sounds good, but in reality it’s a little more complicated because most major stores are not Lyoness merchants. Instead, the Lyoness merchants are small and obscure stores that are usually far and few in-between. It sounds convenient, but really, it’s not.
But what about Walmart?
It’s true that some major department stores are Lyoness merchants. However, that doesn’t mean they’ll accept the card. In fact, Walmart will not accept your Lyoness card unless you click through the link on Lyoness’ website which is essentially an affiliate link to Walmart.
So what happens is that you buy something from Walmart through Lyoness and Lyoness earns a commission while rewarding you with a few cents in return. It’s pretty complicated but honestly anyone can become an affiliate for Walmart, so what Lyoness has done with this store chain is not that impressive.
Most of the registration flyers will contain this card, it’s a kind of recruitment tool that Lyoness members use to promote the company and its services.
Here are what I consider some Lyoness pros:
- Cash-back service. It’s always nice to save a bit of cash when shopping online. I don’t shop online that much but I can see how some people might find it appealing!
- Lyoness is actually not a scam. They deliver everything that they promise and the hype around the company is not as high as other multi-level marketing businesses.
Lyoness Cons: What I Don’t Like…
For starters, the cashback is so low that it’s nothing worth getting excited about. I would rather pay more for convenience than save a couple of cents and chase down Lyoness merchants. I also don’t like how you have to continue recruiting new people to the program in order to make cash.
I have read a lot of reports from members that attended fancy presentations where the host drives a sports card and wears expensive clothes, encouraging members to join so they can do the same. That’s a pretty common recruitment method amongst multi-level marketing businesses and scams.
Conclusion: Is Lyoness a Scam?
So, Is Lyoness a scam?
The answer is no, it’s not a scam because it does deliver on what it promises and it doesn’t promise too much. The main recruitment tool is not based on greed, but rather on saving money shopping, and that’s the same premise the FBI came to when investigating this company.
In fact, the FBI has labeled this company not a pyramid scheme (after a lengthy investigation because numerous reports were filed).
That doesn’t mean it’s a good opportunity!
Actually, there are much better opportunities out there, especially for people that don’t want to feel like they have to buy stuff online just to make some cash.
Lyoness kind of pushes people to buy because that’s how they make their cash, but most people only buy products online once in a while, not every single day!
So that’s what I think about Lyoness. In my opinion, it’s not worth the trouble, and you can make a lot more money investing in your own business. Even if you just offer a simple service, I’m sure you can make way more money compared to working for Lyoness.
Consider learning how to create an online business, here’s a link to my favorite online training course where the whole process is explained in detail. Check it out.
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