Lyoness MLM Review: Is Lyoness a Pyramid Scheme?
If you have been looking for an honest Lyoness MLM Review, you have come to the right place. I know many of you have seen Lyoness members praising the system with all their power and heart. The company clearly has many cult-like characteristics like many network marketing companies have in general.
I am not affiliated with Lyoness so you don’t need to fear that I would be praising the system here. The purpose of my review is to provide you information so you can make an informed decision whether their business opportunity is worth it or not. Some of you have probably asked, “Is Lyoness a Pyramid Scheme?” You’ll get also an answer to that question in my article below.
Founded: In 2003 by Hubert Freidl
Type: Multi-Level Marketing (MLM). Cashback Programs.
Short Review: Lyoness offers two things: 1.Cashback program. 2.MLM business opportunity. With the cashback program you won’t earn very much and most likely it’s not worth your time if you are living in a western country (the earnings are so small). Their MLM business opportunity has a few suspicious things that I explain more in detail in my full review.
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What Is Lyoness?
Lyoness was founded already around 1,5 decades ago by an Austrian man called Hubert Freidl. It’s interesting fact for me because I was just living one year in Austria but never saw anyone selling or promoting any MLM-system. It may be because I was living in Tyrol which is still kinda “rural area” compared to big cities like Vienna and Linz. Anyway, let’s get back to our topic which is Lyoness.
They didn’t stay in Austria but the company spread fast all around the Europe. In 2012 they expanded to the U.S.A. which helped them to grow even faster. Nowadays they operate in more than 40 different countries all around the world.
They don’t sell any physical products but they concentrate on selling memberships that allow their members to get cash back for purchases. Their system is pretty similar to another MLM cashback company called Dubli. There are also huge numbers of other cashback companies but most of them don’t use network marketing. Most famous ones are:
Now let’s take a closer look at Lyoness products and the business opportunity.
Lyoness membership allows you to get up to 5% cashback on your purchases in more than 80,000 different stores (and counting). If I compare a number of Lyoness’ partners to other similar companies, I need to admit that Lyoness is huge. 80,000 partners is a big number and can’t be achieved overnight without consistent work and effort.
Their promise “up to 5% cashback” sounds good but most of the time you’ll earn only 1-3% cashback on your purchases. Let’s say that you buy something, for example, for $100. Then you’ll get $2 back so the product actually cost “only” $98 for you. $2 discount doesn’t sound like a lot but that’s only a part of their bonuses.
As you can see in the picture above they offer also special offers, discounts, and campaigns during a specific timeframe with some of their partners.
Okay, all of us realize that their cashback or bonus system won’t make you lots of money. Most likely it won’t be worth your time if you are living in the Western countries in Europe or in the U.S. where you can earn much more even by doing an average job. Imagine spending an hour on Lyoness website to hunt for a $5 cashback when you could earn $15 in almost any average job.
So, there has to be a better way to make money with their business. Let’s take a look at their compensation plan.
Lyoness Compensation Plan
I could be explaining all the details of their compensation plan to you but I’d rather let one of their long-term members do it. Notice that the video is highly promotional by nature so you need to be careful.
If you have former experience of multi-level marketing, you probably know that top earners are always on top of the pyramid and they have recruited tons of people to the system. Those who fail in recruiting tens, hundreds or even thousands of people to their downline, won’t make much money with Lyoness.
The fact is that their cashback program doesn’t pay enough for making a living so the biggest focus must be on recruiting. You get into their system by paying money. The more you pay, the more you can potentially earn. Those are the principles of their system. But now I would like to show you their income disclosure statement from a few years ago. This is something highly interesting!
Lyoness Income Disclosure Statement
Income disclosure statement shows how their members have been earning (and working) with the company. The following graph is from the U.S. from 2013. I know it’s a few years old but it still gives a great picture of how earnings divide between their members.
There are a few things that I want to point out.
- 90,88% of their business members who are actively working make on average less than $1,760 per year.
- The median income for all Members was $0,04.
- Most top-earners have been working full-time for Lyoness for years.
The picture clearly shows the rough reality of an MLM-business: Most members earn close to nothing. Only the people on top of the pyramid are making good money while others are struggling. The more you pay for the company, the more you could potentially earn. Does this make Lyoness a pyramid scheme? Let’s talk about this in the next chapter.
Is Lyoness a Pyramid Scheme?
Lyoness clearly has some characteristics of a pyramid scheme. Some people call it even a Ponzi scheme.
Even though Lyoness is using a pyramid form in their business it’s not an illegal pyramid scheme. It definitely isn’t a Ponzi scheme. Most Ponzi schemes vanish in a few years because they aren’t offering any value for their members.
That being said I am still a bit confused with Lyoness. It seems that cashback program is just a secondary thing while the MLM-system and pumping it up has a bigger focus. That’s why I find their company quite suspicious.
Conclusion – Is Lyoness Legit Or a Scam? Is It Worth It?
Lyoness cashback program pays quite a little money in general. Usually, you can earn only a few percentages back from your purchase which equals to a few dollars (or euros). Some of their special offers or bonuses a are better and probably worth investing the time. Still, I don’t personally spend time usually on searching for cashbacks.
Financial guru Robert Kiyosaki once said, “Poor people look for discounts in the supermarket. Rich people look for discounts in the stock and real estate market.” With one good investment in the stock market (or in Bitcoin) you can earn 1,000 times more than a single cashback offer.
What about the business opportunity and the MLM-side of Lyoness? Meh… I am not very excited about paying money for the opportunity to recruit more people. Of course, there’s more than that in the system but the biggest focus is and will most likely always be on recruiting. More members bring more money into the system and if they would stop coming, the company would die.
I am not saying that Lyoness would be a scam. They offer cash back in tens of thousands of companies all around the world so it’s far from a scam. But I must admit that I’m not excited about their business opportunity. If you are a Lyoness member, I challenge you to argue in the comments why should I join your system. I would love to hear your thoughts. If you haven’t yet joined Lyoness, I’d rather save your time and money for better opportunities.
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What kind of experiences do you have with Lyoness?
What do you think about MLM-business model, in general?