Lyconet Review: Unit commissions that don’t add up
I first took a peek at Lyconet earlier this year back in February.
Launched in response to ongoing criticism of Lyoness’ accounting unit investment scheme, the purpose behind Lyconet was to completely separate the affiliate side of the business from that of the MLM opportunity.
Unfortunately nothing much has materialized on Lyconet since my first look at it. Even today a visit to the Lyconet website is a complete waste of time.
There’s a login page and that’s it:
No compensation plan details, no information about Lyconet itself, what it’s all about. As it stands almost a year after Lyconet was announced, the Lyconet website is a complete and utter failure.
I’ve meanwhile been waiting patiently for a copy of the Lyconet compensation plan to materialize in order to formally review Lyoness’ new angle. A Polish copy surfaced a month or so back but, while it was translatable, we learnt that the compensation plan might differ from region to region.
Going to the effort to pull apart Lyconet’s compensation plan in the event of the US version being different didn’t seem like a good use of time.
Finally a copy of Lyconet’s US compensation plan was recently sent to me by a BehindMLM reader. It’s twenty-one pages in length and just as headache-inducing as Lyoness’ original compensation plan was.
Nonetheless, I’ve done my best to break it downa and see where Lyconet’s new direction differs from Lyoness’ previous compensation plan.
In the interest of readability, I’ve separated the relevant components of the plan below via heading. Towards the end of this review you’ll then find a conclusion summarizing my thoughts on it.
Shopping only customers are out
Despite it not having anything to do with the accounting unit investment scheme, Lyoness made a big deal about the shopping part of their previous compensation plan.
This was primarily due to non-affiliate shoppers being seen as the retail arm of the income opportunity. With Lyoness themselves only providing access to discounts, that point has always been a topic of debate.
Nonetheless, Lyoness didn’t charge non-affiliate shoppers a signup fee, so the issue only existed within the context of the entire income opportunity. On its own there was never any issue with Lyoness’ shopping portal.
In Lyconet, non-affiliate shoppers have been eliminated.
Referring to them now as “members”, Lyconet sees anyone who signs up on them directly compensated down two levels of recruitment (unilevel).
Dubbed the “Friendship Bonus”, Lyconet pays out 0.5% (50 cents on for every $100 spent) of any purchases made by personally recruited affiliates and those they recruit (level 2).
Again, this commission is available to anyone who signs up to Lyconet or Lyoness as a customer, therefore eliminating the non-affiliate class from the opportunity entirely.
Other benefits carrying over from Lyoness remain intact, primarily a shopper’s own cashback and “Shopping Points” (appears to be renamed loyalty credit).
The Lyconet compensation plan states that Shopping Points can
can be redeemed for attractive Shopping Point Deals and generous discounts on products sold in the Loyalty Mall.
Signing up as a Lyoness shopper is of course still free.
Affiliate commission qualification
The affiliate side of the Lyconet opportunity (beyond the Friendship Bonus) sees affiliates having to qualify for commissions under the Balance and Career Programs.
A Lyconet affiliate able to qualify via the following two methods:
- generate at least 350 Shopping Points via an affiliate’s own purchases and that of their customers
- recruit at least five affiliates who each generate 150 Shopping Points
Once a Lyconet affiliate is commission qualified, the period of qualification is twelve months. Note that meeting the commission qualification requirements within that twelve month period will reset the period an affiliate is qualified for another twelve months.
Ie. Meeting one of the above qualification requirements in January would qualify an affiliate for commissions until next January. Whether intentionally or otherwise, if they met the same requirements in June of that year, they’d then be qualified until June the following year.
The commission qualification period is always counted from the last month an affiliate met one of the above two qualification criteria requirements.
The Balance Program
Shopping Points are used to determine commissions in the Balance Program, with the Lyconet compensation plan stating that these are accumulated via
- purchases made with a Lyoness cashback card at Lyoness merchants
- purchases made with a Lyoness-branded Mastercard made at Lyoness merchants participating in Lyoness’ MasterCard program
- purchases made with vouchers at Lyoness merchants
- purchases made at Lyoness’ online shopping portal
For the Balance Program, the credited Shopping Points generated by the Marketer’s entire Shopping Network (i.e., his entire Lifeline as well as Shopping Points from his own purchases and/or orders) will be converted into Units.
These Units are booked weekly into the Balance Program and the Marketer receives compensation on a weekly basis.
With the mention of “units”, the Balance Program appears to be the current incarnation of what was previously the accounting unit investment scheme.
Here the Balance Program differs however, as it runs of the currency of points, rather than direct investment into units by affiliates.
Otherwise the same binary format is used, placing an affiliate’s own unit at the top of two binary sides (left and right), with an eventual commission paid out once enough units have been generated on both sides.
As with the old accounting unit scheme, there are five levels. What level a unit is created in depends on how many Shopping Points an affiliate has generated in any given week.
- 50 Shopping Points = 1 unit in Balance Category 1
- 150 Shopping Points = 1 unit in Balance Category 2
- 400 Shopping Points = 1 unit in Balance Category 3
- 1200 Shopping Points = 1 unit in Balance Category 4
- 4000 Shopping Points = 1 unit in Balance Category 5
Although not explicitly clarified in the Lyconet compensation plan, I believe units are generated in a “best available” configuration.
Eg. If an affiliate generated 1150 Shopping Points in a week, they’ll receive two Balance Category 3 units (800 points), two Balance Category 2 units (300 points) and one Balance Category 1 unit (50).
The Lyconet compensation plan does not clarify whether or not unused points (less than 50 left over) are carried over from week to week.
Commissions are paid out when 25 units are created on either side of the binary via “subsequent units” (see “Subsequent Unit” explanation below).
The major difference in Lyconet though is that it’s paid out incrementally instead of a lump sum:
- Balance Category 1 – 3 units left and right = $3, 5 units left and right = $15, 10 units left and right = $21, 15 units left and right =$33, 20 units left and right = $39, 25 units left and right = $48
- Balance Category 2 – 3 units left and right = $27, 5 units left and right = $45, 10 units left and right = $63, 15 units left and right =$99, 20 units left and right = $117, 25 units left and right = $144
- Balance Category 3 – 3 units left and right = $90, 5 units left and right = $150, 10 units left and right = $210, 15 units left and right =$330, 20 units left and right = $390, 25 units left and right = $480
- Balance Category 4 – 3 units left and right = $270, 5 units left and right = $450, 10 units left and right = $630, 15 units left and right =$990, 20 units left and right = $1170, 25 units left and right = $1440
- Balance Category 5 – 3 units left and right = $900, 5 units left and right = $1500, 10 units left and right = $2100, 15 units left and right =$3300, 20 units left and right = $3900, 25 units left and right = $4800
Of note is that commissions in Balance Category 2 are Balance Category 1 payouts by a factor of three. Balance Category 3 is a little over thee times that of commissions in Balance Category 2.
Balance Category 4 is ten times that of Balance Category 2 and similarly Balance Category 5 is ten times that of Balance Category 5.
Note that an affiliate cannot generate a unit in any Balance Category until their upline (or their upline) does.
Subsequent Units
Subsequent Units are required to fill up any of the Balance Category binary models outlined above.
In any of the above Balance Categories can be generated as follows:
Personal Units are generated by an affiliate and their personal Lyoness customers.
Transfer Units are generated when an existing unit in Balance Categories 1-4 “matures”. Transfer Units are generated in the next applicable Balance Category up from the unit that matured to create it (eg. A unit that matures in Balance Category 1 (25/25) will create a new Transfer Unit in Balance Category 2).
Customer Units are generated via the shopping efforts of customers recruited by non-Lyconet affiliates (Lyoness shoppers/affiliates). The first, eleventh and every tenth unit thereafter created by these shoppers counts as one unit each for an affiliate.
Bonus Units are additional units awarded to Lyconet affiliates based on the incremental maturity of their existing personal units (see “Bonus Unit” explanation below).
National, Continental and International Balance units
If the Lyconet compensation plan wasn’t already confusing enough for you, things get even more complicated when one considers there are four levels within Balance Categories commissions.
Above we’ve already looked at the “Personal Balance” category, however there are also an additional three categories to consider:
- National Balance – units within a Lyconet affiliate’s respective country
- Continental Balance – units within a Lyconet affiliate’s respective continent
- International Balance – units within Lyconet company-wide
Note that a Lyconet affiliate generates units within these three categories via the generation of bonus units (see “Bonus Unit” explanation below).
Bonus Units
Bonus units are generated based off a Lyconet affiliate’s own generation of units (including transfer and bonus units in and of themselves).
Bonus units are tracked via a binary structure of their own (per unit) as follows:
- 5 units on both sides of a personal unit binary = 1 National Balance bonus unit
- 10 units on both sides of a personal unit binary = 1 Continental Balance bonus unit
- 15 units on both sides of a personal unit binary = 1 International Balance bonus unit
- 20 units on both sides of a personal unit binary = 1 National Balance bonus unit
- 5 units on both sides of a National Balance unit binary = 1 National Balance bonus unit
- 10 units on both sides of a National Balance unit binary = 1 National Balance bonus unit
- 15 units on both sides of a National Balance unit binary = 1 National Balance bonus unit
- 20 units on both sides of a National Balance unit binary = 1 National Balance bonus unit
- 5 units on both sides of a Continental Balance unit binary = 1 Continental Balance bonus unit
- 10 units on both sides of a Continental Balance unit binary = 1 Continental Balance bonus unit
- 15 units on both sides of a Continental Balance unit binary = 1 Continental Balance bonus unit
- 20 units on both sides of a Continental Balance unit binary = 1 Continental Balance bonus unit
- 5 units on both sides of an International Balance unit binary = 1 International Balance bonus unit
- 10 units on both sides of an International Balance unit binary = 1 International Balance bonus unit
- 15 units on both sides of an International Balance unit binary = 1 International Balance bonus unit
- 20 units on both sides of an International Balance unit binary = 1 International Balance bonus unit
Note that whereas personal units are tracked only via an affiliate and their downline’s unit generation, National, Continental and International Balance units are tracked via company-wide binary structures (per unit).
Balance Program Referral Commissions
Dubbed the “Coach and Senior Coach Bonus”, Lyconet pay out referral commissions on Balance Program commissions paid to personally recruited affiliates and any affiliates they recruit (2 levels).
A Lyconet affiliate earns 20% of Balance Program commissions paid to affiliates they’ve personally recruited, and 5% of Balance Program commissions paid to their recruits (level 2).
The Career Program
For the Career Program, the credited Shopping Points generated by the Marketer’s entire Shopping Network (i.e. his entire Lifeline as well as Shopping Points from his own purchases and/or orders) will be used to calculate the relevant Career Level each month.
The Marketer will receive monthly compensation.
Before we get into what any of the above actually means, it’s important to note that, like the Balance Program, Lyconet’s Career Program also revolves around the generation of Shopping Points.
Counted Shopping Points in the Career Program differ to that of the Balance Program slightly, with Shopping Points only counted via the following methods of generation:
- purchases made with a Lyoness cashback card at Lyoness merchants
- purchases made with a Lyoness-branded Mastercard made at Lyoness merchants participating in Lyoness’ MasterCard program
- purchases made with vouchers at Lyoness merchants
- purchases made at Lyoness’ online shopping portal
- Lyoness’ “Loyalty Program”
I’m not sure why Lyconet mention the Loyalty Program, as I figured that was part of the Lyoness shopping network to begin with.
In any event, for reference here’s how Lyconet define the Loyalty Program as it appears in their compensation plan:
A Loyalty Program created by Lyoness where Members shop and receive Benefits according to the Lyoness GTCs.
In a nutshell, the Career Program rewards a Lyconet affiliate based on shopping point generation by themselves, their customers and three levels of affiliate recruitment.
How much an affiliate is paid is determined by how many points they’ve generated in any given month:
- 5000 Shopping Points – 3.7 cents per Shopping Point, no Career Bonus
- 10,000 Shopping Points – 4.8 cents per Shopping Point, $300 Career Bonus
- 25,000 Shopping Points – 5.6 cents per Shopping Point, $750 Career Bonus
- 60,000 Shopping Points – 6.3 cents per Shopping Point, $1800 Career Bonus
- 150,000 Shopping Points – 7.1 cents per Shopping Point, $4500 Career Bonus
- 400,000 Shopping Points – 7.8 cents per Shopping Point, $12,000 Career Bonus
- 1,000,000 Shopping Points – 8.6 cents per Shopping Point, $30,000 Career Bonus
- 2,500,000 Shopping Points – 9.3 cents per Shopping Point, $75,000 Career Bonus
Note that up to 50% of the required Shopping Points at any given Career Program level above can come from any one individual recruited affiliate and their downline (one unilevel leg).
Also note that commissions calculated from Shopping Points generated by recruited affiliates who qualify at one of the above levels, are reduced based on the level difference they qualify at.
Eg. If you qualify at level 3 (25,000 Shopping Points a month) and an affiliate you’ve recruited qualifies at level 1 (5000 shopping points a month), for the purpose of commission qualification you will be paid 1.9 cents (5.6 cents (level 3) minus 3.7 cents (level 1)) per Shopping Point generated by that affiliate and their downline.
With any of the above levels, a Lyconet affiliate is promoted the month after they qualify. If they qualify again the following month, they are then “confirmed” qualified at that particular level for the next 6 months.
If the affiliate fails to qualify again the month after initially being promoted to a Career Level, they are confirmed at the level below the one they initially qualified for. This downgraded qualification confirmation still applies for six months.
Note that re-qualifying in any month of the six months of qualification will reset an affiliates total qualified period for another six months (in the same manner as commission qualification does).
Conclusion
The two biggest issues I see with Lyconet’s compensation plan is the lack of a retail offering (both as a carry-on from Lyoness and the introduction of shopper commissions), and the Balance Program.
The question of whether Lyoness sell products and services to retail customers has always been a huge grey area.
On paper, Lyoness provide discounts to third-party merchant products and services. They don’t charge fees to regular (non-affiliate though, and on the affiliate side of things it was only the direct investment into accounting units that acted as a defacto affiliate membership cost.
With Lyconet, everyone is an affiliate – either via Lyconet themselves or simply by signing up as a Lyoness shopping member. The affiliate opportunity doesn’t need to be explained but regular shoppers also earn commissions down two levels of recruitment.
This means they are no longer retail customers, even within the grey area context that saw them counted as such under Lyoness.
The end result is that by introducing Lyconet, Lyoness itself as a company no longer has any non-affiliates purchasing products and services through their portal.
Everyone is in one way or another participating in the income opportunity and this is a problem. In MLM you need to have readily identifiable non-participant customers otherwise you’re just asking for trouble.
Moving onto Balance Program, here we have the continuation of the accounting unit investment scheme.
The shopping side of Lyoness has never been in question. You shop, get a cashback and if you spend thousands of dollars you get a unit.
In Lyconet the “accounting” prefix has been dropped in favor of the simply calling positions in the compensation plan “units”.
What struck me as odd was the mention of “orders” in the compensation plan. Previously affiliates had invested directly into accounting units, receiving a ROI once enough new units had been invested in.
The marginal units created via shopping were obviously neither here nor there, with most units the result of direct affiliate investment.
In Lyconet shopping units are still created (from shopping points), but whether direct investment is still possible is not so clear.
Despite the complete lack of information available on the Lyconet website, I did my best to track down what exactly the mention of shoppers being to place “orders” in the Lyconet compensation plan was referring to.
Taken from the Lyoness website:
The Lyoness Voucher for Loyalty Merchant Vouchers is the perfect gift. With the Lyoness Voucher you have exactly the right thing to shop with, because you can use it in a variety of ways.
You have the option of using the Lyoness Vouchers to pay for your online order at a Lyoness Loyalty Merchant. With Lyoness Vouchers you are always flexible and can order other Vouchers at any time without having to make a transfer.
Vouchers are receive digitally and are particularly convenient, as you can order them while on the move, pay for them using your existing Vouchers and redeem them immediately – and of course you will also receive Cashback and Shopping Points, the amount of which depends on the selected Loyalty Merchant.
Paying for vouchers using vouchers? Huh?
In Lyoness affiliates invested directly into accounting units under the guise of purchasing gift cards. With Lyconet the units are tied into Shopping Points, so there’s room for ambiguity here.
The Lyconet compensation plan doesn’t clarify whether or not fees are charged when vouchers are purchased. Ditto whether or not vouchers can be used to purchase shopping points directly.
Infact, other than the mention of “orders”, there’s literally no explanation in the Lyconet compensation plan as to how exactly they fit within Sales Point generation for the purpose of unit acquisition.
What is clear however is that, within the context of an MLM opportunity, vouchers are not the sale of a product or service.
Repeatedly in the Lyconet compensation plan a distinction is clearly made between actual purchases and whatever “orders” is:
Personal Units are generated using Shopping Points collected from the Marketer‘s purchases and orders.
I don’t know about you but this suspiciously sounds like a rewording of “downpayments”, which was the terminology Lyoness used to describe affiliates investing in account units.
If that’s the case, then the accounting unit scheme that was problematic is left intact within Lyconet.
At best you’ve got a shopping network that facilitates the generation of units via non-purchase of discount vouchers, with said units paying out a cash ROI after enough subsequent units have been generated.
On the other end of the scale Lyconet is just an exercise in pseudo-compliance, designed to complicate even further the simple of act of taking new affiliate funds and paying it out to those who make deposits, I mean downpayments, sorry… “orders” earlier.
And the linear nature of the national, continental and international unit placement? That just screams single-line cycler queue!
The same sort of nonsense we see in matrix cycler scams where you pay for your position and then collect a ROI once enough new positions have been purchased company-wide.
One final observation about the Balancing Program is the rampant generation of phantom positions (transfer and bonus units).
These positions cost nothing to generate yet they pay out a ROI just like a paid position (a position that had actual affiliate funds flow into the scheme to create it).
What’s worse is when you consider transfer units move up the Balancing Program levels, at each level they continue to pay out a higher cash ROI.
Where does this money come from? Surely Lyoness’ merchants aren’t funding all of this on top of the cashback they offer?
How is compensating Lyoness affiliates to the tune of tens of thousands of dollars even remotely sustainable for them?!
My gut tells me there’s information that’s been deliberately left out of the Lyconet compensation plan. Information that clearly shows a flow of affiliate funds into Lyconet that covers both the Balancing and Career Program commissions being paid out.
One has to remember that the Lyconet compensation plan was designed to directly integrate into Lyoness’ existing accounting unit scheme. As such, right out of the gate, Lyoness has large existing liabilities to cover by way of old accounting units needing to mature and be paid out on.
The Lyconet system tacks onto that, hoping to fund existing unit ROIs, attract new funds with a new unit system and somehow pay out thousands of dollars on an ever-increasing amount of zero-revenue phantom unit positions. Not to mention Career Program bonuses which serve to only further drain available funds.
I ask again, where is all the money Lyoness promise to pay out come from?
Under Lyoness everything was mathematically calculated, with the company paying out only after a fixed amount of new funds was pumped into the scheme. Lyconet appears to shed that image, leaving a huge question mark over its source of unit and career bonus commission revenue.
Either there’s a large chunk of the compensation plan missing which explains how affiliates pump funds into the scheme to cover these liabilities, or the math behind Lyconet’s compensation plan simply doesn’t add up.
Thanks to BehindMLM reader “Nagash” for sending in a copy of the compensation plan!
I nuked the original comment so as not to cause confusion on the other article, let’s keep all discussion about Lyconet’s compensation plan over at this article instead.
Cheers.
Seems these guys rely on “wall of text” defense… Have a comp plan so utterly incomprehensible people just give up.
The mention of vouchers is rather suspicious. One wonders if one can buy vouchers (which generates shopping points) and somehow “roll them over” (i.e. buy vouchers with vouchers) from month to month and thus keep money in Lyoness and encourage others to do so to generate more points without actually BUYING anything except these virtual purchases.
One also wonders if the term “vouchers” is used to bypass laws regarding gift certificates (of which there are many, such as expiration, fees, etc.)
Someone needs to do a chart on how many points can a typical member generate based on 1000 dollars shopping a month (nice round number), recruiting a network of similar shoppers (10, 100, 1000, 10000)
A shopping loyalty program should not be a business opportunity. Any mention of “career” or “coach” gives me pause. I’d concentrate there.
It looks more clear, when you consider that ordering original merchants vouchers via Lyoness you get ie. 2% cashback and 1 Shopping Point if an order is more than 125$, but you can buy as well Lyoness voucher as an exclusive offer available for Marketer on certain conditions, where you get no cashback, but 50 Shopping Points for 75$.
You can exchange these Shopping Points for discount if you decide to buy original merchants vouchers or you book them in acounting system and generate units this way. You can get Shopping Points also buying them by redirecting cashback to Lyoness.
More important are IMO changes of legal position of affiliates, former Premium Partners and yearly fees for different L-user acount options acccess.
They are all not entitled to their money paid in as future shopping downpayments now – or the cash has been exchanged for Shopping Points, or they give it to Lyoness for access to International Program or they top-up downpayments with remaining 97% of voucher order amount or it’s lost.
@Kasey
Ah I didn’t consider this in my conclusion!
The Lyoness website does indeed say you can use vouchers to buy vouchers (I bolded it in the review conclusion).
Of course buying vouchers triggers shopping points so affiliates would now be investing in vouchers, recieving shopping points and dumping those points into units.
Then they simply use the vouchers they have to buy more vouchers, and repeat the process again. There’s probably a conditional trap in there somewhere where by affiliates have to cough up a bit more money (ie. a voucher used to purchase another voucher isn’t a 1:1 transaction), but otherwise it seems the AU investment scheme lives on.
Buy vouchers, bypass the merchant network and continue to invest in (balancing) units.
That was my impression with the old compensation plan. “Designed to confuse / designed to trick the brain”.
One example from the old CP:
It isn’t difficult to understand “in itself”, but all the details back and forth will require a specific type of focus to get it straight.
It will stress the “pattern seeking part of the brain” too, with all the different combinations of the same 3 or 4 elements arranged in different “patterns”.
I had a quick look at the Lyoness store.
Clothing was 1-4 points per $150 purchase. House and Home was 1 to 18 (home energy) points per $150 purchase.
I think 18 is definitely on the upper end. Oh and if you spend less than $150 you get no points, only cashback.
I’m thinking voucher investment is going to be in increments of $150 then.
Maybe you should seek to get the whole story, or watch one of the several webinars/wk. before you start posting reviews
Seek what exactly? What other than the company’s own compensation plan documentation could provide a clearer picture of “the whole story”?
Right, because marketing spam > a compensation plan.
And from my experience, Lyoness affiliates are rather clueless about the ins and outs of their compensation plan.
The original BehindMLM Lyoness review (1000+ comments) is full of investors crapping on about the merchant network, being shown the AU Ponzi scheme, admitting it’s dodgy and then never being heard from again.
Thanks for the read, just a few points of clarification…
You get partial shopping points for spends under $150. For example, if a merchant offers 2 shopping points per $150, you’d get 1 shopping point for a $75 spend, or whatever fraction thereof.
Also I’m not certain if you’ve taken this into account in your thought process, but a Lyoness Merchant that offers 2% cash back isn’t just paying 2%, theyre actually paying 6%.
That gets divided up to give you your cash back, friendship bonuses, and other aspects of administration and compensation. The plan is a little confusing to be sure though.
Lyoness itself is no different then Airmiles or a cash back Visa; it’s all just a loyalty program funded by merchants to bring customers in through the door. Lyconet is the more confusing aspect, however can be built/worked with no cash injections.
It’s all about building a network of shoppers under you, no different than Amway or Avon.
I think you’ll find that doesn’t even come close to covering the ROIs offered on units.
Let alone Lyoness’ costs and everything else.
The system relies on funds being trapped in the system while awaiting new funds to enter (new units generated).
Yeah that was the official marketing line for Lyoness. With Lyconet it appears to have carried over.
Pity nobody who actually makes money in Lyoness has a network of non-affiliate shoppers under them.
To quote CEO Herbert Friedl, “It’s all about positions, positions, positions!”
Nope. In Amway and Avon you actually SELL something (from the respective companies).
You sell NOTHING under Lyconet / Lyoness.
What I want to know is, is it even possible to get your money back on these so called down payments of units?
Alot of people are out of alot of money and really frustrated. Including me and my whole team.
We are sick of no answers, no transparency, no information on the calls, its just alot of hype.
@broke
As I understand it you were able to with the units to some degree (not 100% sure).
With the shopping points though who knows (including AUs converted into shopping points). I suppose Lyconet support have been giving you the run around?
The new look Lyoness/Lyconet is still very new and evolving. If you have questions and someone in your upline can’t answer, then go higher and higher.
Yes you do get your money back on the down payment of units……it is much easier now.
I would suggest you get in contact with the head office in Sydney and they can give you contacts of leaders in various states who can give you answers (or I am more than happy to let you know).
Please remember that it is a BIG change from what we have all been used to. The website is also a work in progress……
An affiliate commented here with a Lyconet link back in April 2014. Exactly how long should it be expected to take for Lyoness to get their shit together?
Lyoness are currently fighting an Australian regulatory lawsuit that alleged they are a pyramid scheme.
Sounds like the AU investment scheme is alive and well then. Which means they’re likely to lose the ACCC lawsuit.
You’re obviously based in Australia so I hope you didn’t just join and plonk your money down.
Austrian Lyoness victims website revealed part of files from Hubert Freidl criminal case – they have an acces to the documentation as some of them joined the courtcase as public prosecutors.
It seems that we can see judical seizure of his bank account, and some more info concerning his role in this swindle, diretly from WKStA, Economic and Corruption Prosecutor that leads the case (unfortunatelly it is in German).
lyoness-geschaedigte-plattform.at/viewtopic.php?f=2&t=3524&sid=3301f66ee40acb58da076ea1274b4f4b
lyoness-geschaedigte-plattform.at/viewtopic.php?f=2&t=3525&sid=3301f66ee40acb58da076ea1274b4f4b
@Broke and Mad
A friend of mine duped by Lyoness is building a website to support people who feel mislead and deceived by Lyoness America.
As soon as the site is up I’ll post the link. The idea is to eventually build a class action suit against Lyoness America. If Oz is ok with it I’ll post the link soon.
Hang in there ….a lot of people share your frustration and disappointment.
@Scamkiller99
If there’s any asking of donations or anything other than the providing of information to form said class-action, then I’ll nuke it.
Otherwise I have no problem with readers sharing information that’s of mutual interest.
No asking for donations – just a link:-)
In Swedish Game Board appealed from prosecutor decision to close the invedstigation because of ‘it is not possible to prove who or which committed the act.’
lotteriinspektionen.se/sv/Press/Nyheter/Nedlagd-forundersokning-av-Lyoness-overklagas/
That’s a bit rough. Lyoness committed the act obviously.
Surely the Swedes have injunctions in the absence of a corporate presence?
Just for the record – Mastercard on their fanpage denies any relationship between them and Lyoness:
facebook.com/mastercard.polska/posts/1546932762257251?comment_id=1550496711900856&ref=notif¬if_t=share_comment
Is there any possibility of getting my money back out of Lyoness? Can I purchase the giftcards for which I paid a down payment?
As I understand it, downpayment money is lost to you until enough new investors invest AUs in your binary. Or shopping points or whatever it’s called now.
You can use the units (partial down payments) towards a purchase.
If the product price is $1,250, and the merchant offer 6% Loyalty Benefits, one $75 unit can be used as a partial payment ($1,250 * 6% = $75).
That description was from memory, based on some explanations from Lyoness members long time ago. I’m not sure I remember it correctly. The explanation was based on the old AU system, and I’m not familiar with the new system.
I believe you can purchase the gift card(s). The typical down payment of $3,000 (€2,000) was for 7+3+3 units, so you will actually need to “top up” 3 gift cards to get your money out in that way.
Lyoness is a pyramid or Ponzi scheme. You must recruit minimum 4 other investors to earn a profit on your investment, and those 4 must recruit 4 each.
Or you can slowly generate your own units through shopping (not making any initial investment / down payment). But the AU system won’t make much sense for a consumer, it will only make sense for a recruiter.
Thank you so much. Do you know if I can combine before topping up? I am having a really hard time getting answers from Lyoness.
Scamkiller99, I would be most interested in that link when it is up.. I feel totally scammed by Lyoness.
I have a fairly low member number and was told by all the leaders that there was nothing I had to do by doing a “downpayment” in helping to grow the new countries.
Now they have changed their comp plan.. What a joke and a bunch of hype!
Unless you are are marketer with a bunch of people following you, don’t bother to join, it is more work than it worth and the big “merchants” eventually drop off anyway.
@cab
I will make sure to post the link when we are ready with it.
Your story sounds like many other who invested in Lyoness India or Brazil (so called passive markets) and have made nothing.
Hang in there – I want to close Lyonees down in the U.S. And I’m doing all I can.
For two years I tried to get my $3000 back from Lyoness. No luck.
The only way to recover some money, to actually spend more (which, I don’t have).
Any advise? Do your best, I’ll sign up for class action suit to recover my loss!
hello !
I just wanted to point out that THE COMPESATION PLAN is explained and available on any Official Lyoness/Lyconet Website . simply scroll all the way to the bottom and click on General Terms and Condisions (GTC’s) .
All of your questions are there ! just read it .
here is a link anyway (Ozedit: Link removed. T&C is not a compensation plan)
^^ I had a look at the T&C linked and there’s no compensation plan there.
Lyconet to this day continue to hide their MLM income opportunity compensation plan from the general public.
to get access to the Lyconet GTCs you must first accept the Lyoness GTCs as a Lyoness member . this is to ensure you actually understand Lyconet as its based on Lyoness .
@Eric
Nobody is talking about the GTC.
Like I said, to this day Lyconet continue hide their MLM income opportunity plan from the general public. This is and remains a big red flag.
I would just like to point out this of Lyoness, We have pulled out of being an SME two months ago.
Why? We got no business from this program all efforts are on signing people up with the SME as a front.
You go to the training programs there are a few SME there they are not given anytime to talk about their business or support. After talking to a few we are all in the same boat very few customers.
To us the SME is a front of there pyramid scheme, yes I called Lyoness a pyramid scheme because it is.
We were sucked in with the line ” do you want more customers” yes and what business would like more customers, we were told that there are X amount already signed up and sure you will get customers all the advertising we did on the website not one customer.
And of course there is no refund amazing no money back There will be a big issue raising soon with the SME having to start paying there monthly fees so watch out.
Eric Breiteneder, the Austrian lawyer who sued Lyoness on behalf of hundreds of Premium Members, also sued on behalf of several SMEs. He managed to negotiate a 75% refund for the SMEs, IIRC, while the Premium Members got 100% refund.
But that was Austria 2 years ago. Breiteneder later sued Lyoness on behalf of WKI consumer protection organization, on behalf of all affected consumers in Austria, and got a decision from a commercial court that the contracts were unenforceable and illegal.
That decision has been appealed by Lyoness, pending before an appellate court.
So the Austrian case is slowly moving forward in the right direction.
Lyoness IS or WAS a pyramid scheme, but not in each and every component, e.g. the cash back system is probably legal. I’m not familiar with Lyconet or SME contracts, I focused primarily on the AU investments and the down payments.
To a merchant, recruiting consumers into a third party recruitment driven investment scheme is not “normal behaviour”. It’s not something a merchant legally can do as a part of running a business.
Recruiting consumers into a cash back system should be okay. There’s nothing illegal in that. The illegality is about consumers or merchants paying for the opportunity to earn rewards based on the recruitment of other paying participants.
Generally, there’s nothing wrong in introducing other merchants into a cash back system that actually works. But it will probably be illegal to earn commissions on the other merchants’ sales to consumers.
Merchants don’t have “downlines” with other merchants. A merchant shouldn’t pay any fees to merchants in an upline, organized through an unrelated third party organization like Lyoness.
I have a few questions: What kind of business are you in Jasmine?
Also, since there is no monthly fee to be a merchant why would you quit? Y
ou have nothing to lose by staying in the program; there is no monthly fee and you only pay after someone has bought something and you’ve collected the payment from your customer.
How long were you a merchant? How many people in your area are members? How many of your own customers did you register?
The Lyoness “Merchant Search” website isn’t very “user friendly” for consumers. Google is much more user friendly if you’re looking for products or merchants in a specific district.
The website has probably been set up to look attractive to merchants, to be used in Lyoness’ own marketing of itself as a shopping network.
I have tried it several times since 2012, e.g. each time I have checked examples people have mentioned, each time I have tried to calculate average cash back for specific types of merchants, each time I have checked specific countries or districts.
For a consumer, that website simply isn’t very useable. It isn’t very “intuitive”, i.e. it doesn’t try to make any qualified guesses for what the consumer really is looking for, so a consumer will usually get the wrong types of search results. But it looks “organized enough” on the surface.
– – – – – –
This was mentioned because I won’t recommend you to be too “trigger happy” for lawsuits. Look for factors that MAY be used for cancellation of contracts and refund.
@M_Norway
That part I don’t understand; Could you elaborate a bit more ?
Martin
Why has “Jasmine44” not enlightened us in the reasons “she” supposedly stopped being a Lyoness merchant?
It’s a real business that takes real effort and if a merchant does not use the marketing program properly they cannot expect good results;any business faces that reality.
BTW I agree the website can be improved but when it comes to local merchants, like supposedly Jasmine44, most people use their smartphone app to locate the merchants.
M_Norway you apparently don’t use the system the way a real shopper would; why don’t you download the app and see what’s around you.
Another “problem” with being a Lyoness merchant is that a business may not be that much in demand in the first place.
I’ve seen crazy merchants like a boutique candle store or “energetic healing” centers come in as a merchant. How many people in the general public are already looking for a candle store or an energetic healer anyway?
They are surprised when they don’t have a flood of new business? Sometimes they are one of the very first merchants in an area; there may be only a handful of people with memberships in their area. No surprise people aren’t lining up immediately.
On the other hand, many merchants give out Lyoness memberships to all their existing customers and make money on those customers every time they shop elsewhere.
They also refer the Lyoness business to other business owners so they can all share the customer base.
The shoppers get cashback and other benefits, the merchants get new customers and increased customer loyalty at a reasonable cost, and the network also benefits. THIS is what the company is all about.
Unfortunately it seems this page is only focused on the units a marketer can create IF THEY WANT TO…NO REQUIREMENT TO DO SO, in the beginning.
I think a lot of the people who complain about the company are people who THOUGHT Lyoness actually was a ponzi scheme and put money in thinking they’d get something for nothing.
When they found out they actually have to WORK to build a business, create shopping volume and build a legitimate business with the requisite effort, they scream foul and want their money back.
Some of those people probably DID want to be a part of a get-rich-quick scheme and Lyoness is not like that.
I used it exactly like a real shopper would do when using a laptop. I have tried the online “Merchant Search” many times since 2012. That website isn’t very user friendly, it will mostly give the wrong types of search results if people are looking for a type of merchant or a type of product in a specific district.
It looks “organized enough” on the surface, but it doesn’t produce the expected search results (compared to e.g. Google).
I have simply looked at “What are the normal roles of a merchant?” and “What are the Lyoness’ specific roles?”.
There’s nothing wrong in merchants using a third party loyalty program based on cash backs or a point based reward program.
* Cash back is a type of discount.
* Reward points is a type of delayed discount, e.g. a “pay for nine air travels and get the tenth one for free” type of discount.
Those down payments in Lyoness makes it controversial for a merchant. It’s not a normal part of the merchant role to recruit customers into a pyramid scheme style of investment program.
The recruitment of other merchants may be controversial too. It’s not a normal part of the merchant role. Merchants paying commissions to an otherwise unrelated “upline” will be more similar to recruitment commissions in MLM or network marketing.
It’s a type of pyramid scheme for merchants. The first ones in will profit from the ones joining later. The system will eventually run out of new merchants it can recruit, and most of the merchants will actually lose money on that part of the deal.
Which marketing program?
Jasmine44 complained about that they didn’t get much customers from the Lyoness program. Most efforts seemed to focus on recruitment. But you believe a marketing program could have been a solution?
Why would a merchant wish to share his or her customer base with other merchants through a third party loyalty program?
It doesn’t make much sense for the merchant, for the primary part of that merchant’s business?
@Jasmine44
Some updated information about lawsuits in Austria and EU can be found in another thread (copy and paste, it’s a disabled link leading directly to a post).
behindmlm.com/companies/lyoness/accc-lyoness-case-update-discovery-june-hearing/#comment-339600
That solution won’t be relevant for you. But some background information of that type may eventually become relevant to a lawyer or others.
Some more from that same post:
@M_Norway,
I’m sure you know the answer to that question ?
To not only see his OWN customers return using that loyalty program,b(which of course is the whole idea), but also have NEW customers walk in, using that same program offered to them by other participating merchants.
That’s partly true: If a merchant (has the option) and receives commissions on the retail sales from *other* merchants that joined through him/her, those commissions will indeed dry up if no new merchants join anymore.
A merchant should however consider those commissions as an added bonus to the primary function of that shared program which is increasing turnover/profits in retail sales.
🙂 By the time the commissions from other retailers exceed his own retailsales/profits.. It’s time to close shop.
(N.B. My question and response are not related to Lyoness, so I guess its somewhat off topic.)
As I can read, the biggest problem is, that most of you switched the word CAN for HAVE TO.
As a Lyoness / Lyconet customer/user you CAN pay in advance, you CAN order discount vouchers, you CAN recruit more customers or marketers, etc. But you DON’T HAVE to. That’s a big difference.
If somebody told you HAVE TO invest money, sue HIM for false informations. If somebody told you HAVE TO recruit more people to get money from Lyoness, he tricked you.
Also units – you don’t HAVE TO invest money into units, just shop if you wish from partners and let the program do it’s work. If you want use all of benefits, recommend free Lyoness to your friends or if you are SME, to your customers and let the program do it’s work.
If you are a customer and you are forced to pay anything in order to use the loyalty program, take action against the person who tells you this crap.
“Can” is just pseudo-compliance. A dodgy investment scheme isn’t legitimized because participation is optional.
You substituted “can” with “not required” when you actually don’t have ANY numbers to prove or disprove how much this was done.
At best, you’re pot calling the kettle black.
the biggest problem with lyoness is that piss poor percentages on retail do not cover the commissions paid to reps. reps are paid commissions chiefly from funds from fresh reps.
what reps ‘can’ or ‘have to’ do, is a side issue.
I am a “premium member” and got dupped into Lyoness. #baddecision
I just want my $3,000 back. I have asked Lyoness multiple times to return my money. “No,” was the answer.
I am in the U.S if anyone wants to join forces for a class-action suit.
I am a PREMIUM MEMBER in Lyoness. You guys have to know FEW THINGS:
1. There is people who want to do something in their life
2. These is people who want to blame for everything in their life
When you become premium member YOUR MONEY are STAYING ON YOUR PERSONAL ACCOUNT and u can USE THEM by shopping. THEY ARE YOURS.
In 12 months i achieved CAREER 4 which means 1200-3600$ per month in country where MONTHLY SALARY is 200$ a MONTH.
LYONESS and LYCONET and CASHBACK-SOLUTIONS is a BUSINESS #1, it is not an investing sheme.
STOP CRYING and go get to HARD WORK. I feel sorry for those who heard about this business and they didn’t understand it, even worse they blame because its all about they know.
Just wait and blame few more years, and then suddenly everyone will use Lyoness more than Facebook.
I am not used to write as i did it now and this is first and last time that im writing but i MUST DO for all you NON-EDUCATED blamer experts!!!
Peace Out
Best Regards
you invest funds with Lyoness, and then collect a ROI from Lyoness when you recruit enough affiliates who do the same.
Yes, we’re well aware of how Lyoness works here.
You must have scammed an awful lot of people then. Can’t imagine too much Lyoness shopping goes on with a $200 a month average salary.
The local merchants must be lining up hey…
people who are unhappy with lyoness aee those who never understand the Lyoness business modeule and they were not committed enough to acheive enough to say YES lyoness is the best business in the world.
I am with lyoness for more then 2 years and i bought then business which i linked with lyoness and now i am sme owner with lyoness and it really works and i am more then satisfied as a shopper as a networker and as a sme owner.
What does that have to do with investing in AUs and convincing others to do the same?
So how many of your customers have you convinced to sign up and invest in AUs then?
We already know shopping generates AUs at a snail’s pace, so unless your comfortable making nothing there’s obviously AU investment at play.
I am thinking of joining lyoness and lyconet. Would I be really wasting my time? All is so complex and not simple to desifer or comprehend. Trying to find out if the pros out weights the con’s.
Is it a time waster? Can’t trust people in the business, they are money vultures.
Anthony Norris
I think you might have answered your own question there.
Hi, Guys, I am new to this whole Lyconet marketing thing and I like what I see BUT there is one thing that bothers me… If you buy Units per month WITHOUT contributing to shopping (without building a shopping network) just to get a piece of the pie… where does the money that gets paid out to you come from?
How does that small contribution that you make monthly (The monthly purchased Units) generate the money that gets paid out to you when those Units start balancing out?
What if 9/10 people that join the Lyoness (Now known as myWorld) community decides that they only want a piece of the pie and ONLY buys their monthly Units expecting a big payout after a few years… where does the money getting paid to all these guys come from?
Am I missing something here?
If you sign up, invest in units and then don’t recruit, your only hope is someone above you is recruiting and building new investors under you.
No new investment under you, be it from directly or indirectly recruited new investors = no ROI.
What you describe (new investors signing up, nothing happening) is the story of Lyoness in every country it’s collapsed in.
Anyone who tells you getting shoppers is the equivalent of recruiting new investors is lying.
Getting a ROI through shopping only works if you have access to a ton of gullible schmucks to sign up (sports club, local council, you run a big business with lots of customers to spam to etc.).
Hhmm yeah as I thought.. thanks Oz.
The way I see it:
1. Join for free and shop through Cashback world; get cashback. Let your friends who want to do the same do so. No harm done.
If you think the reward is too miniscule do not touch with a barge pole. End of story.
2. You want to do it as a business; understand Lyconet first. Get your mindset into business mode and strategise. Be prepared to learn, hustle and teach as you would do for any business.
More importantly use your own products and market them. Be a guide and mentor to those you sign up. Have a goal and help the people below you to reach theirs too.
Conclusion: It would be foolish to dive into something you do not comprehend; if you do not like it do not even contemplate joining up. If it is not for you do not ‘enter’.
This is not a get rich quick scheme; it is just a platform to be used by those that wants to be a part of it; either earning a little cashback using a single card or becoming a businessperson on a very low budget using a ready made platform.
People are more than capable of thinking for themselves and should not be clouded by ’emotional greed’.
How you see things is irrelevant when you completely ignore the core of Lyoness’ business model:
1. Invest funds in accounting/shopping units;
2. recruit new investors who do the same and get paid a ROI out of subsequently invested funds.
The shopping cashback exists solely as a lure for the unit Ponzi lurking within.
Your unit investment ponzi accusation fails immediately once you understand that all those 3000 dollar “investments“ you mentioned are fully re-cashable!
So no one looses money here. Yes it takes a lot of purchase to re-cash three grand alone.
But savings are real! And you can re-cash from your free Cashback members purchases too so it can be fast.
So Noone scams people here. And savings are real. And the opportunity to get out of the 9 to 5 slavery is real too.
Yes there are bad apples who do not fully explain the system or they do not themselves understand it and start immediately recruiting.
You do not understand it either, this is why you have so many questions. You should not badmouth something you do not comprehend!
You can’t legalize a Ponzi scheme by adding stuff to it. I invest in AUs. I recruit new investors and Lyoness pays me a ROI out of subsequently invested funds.
Not withstanding it costs thousands upon thousands of dollars in shopping to recoup Lyoness investment losses, when it’s far easier to just recruit new investors.
You need only look at countries where Lyoness has launched and flopped to see actual victim losses. Once AU investment dies so does the shopping.