Experiences with Lyoness? Scam?

Factual Questions
21

I’m pretty sure in this country people could find a reason to sue anyone affiliated with a ponzi scheme…so for that reason I’m sure they give a shit.(look how many people are being sued for making money on Madoffs scheme)

Last I checked Amway wasn’t a pyramid scheme either, even though I know very little about them…and know nothing of Herbalife.

The premise of this company is quite simple…you purchase things as normal, except within the Lyoness vendors. Thats it. If you would normally spend $100 at the pump, you are still gonna spend that same $100 in a gas card, but now you will receive cash back and additional benefits and you would need to go to BP.

22

I really want to see how it is that you plan to make money, from your ‘retail’ store.

You presumably are not as large as BP, so you don’t have the volume to sell $2,000,000.00 in gift cards at a discount, as per the example you gave above.

Why would YOU sell things at a 30%-40% discount?

Is your profit margin big enough to accept that on every single item you sell?

If not, then why would you absorb the losses?

Or is there someone you can buy from who sells every single item you sell who is also a part of the network, who can so allow you the discount which you can then pass on to the customer?

If so, how can they afford to sell at a loss?

Basically, this doesn’t work out, unless your network is so large that the manufacturers of every single item you sell are in on it, and if they are making so much stuff that they can afford to make a profit from pennies per item.

Basically you are describing buying into a communist-ideal virtual intentional community at that point.

Would be interesting, but I would want access to records before I would sign up, I think, to verify that it is, in fact, legit.

I still don’t see the regular end user ‘making’ money, however. Unless you are selling to outsiders who don’t get the discount to finance yourself, you wouldn’t ever make money- it would be a circular system.

If you are, as you say, limiting yourself to doing business with others in the network, then they would be buying from you at the same discount you are buying at (that’s the point, right?) so they are basically getting the item for cost- if they weren’t, they would go to the same in-network seller you are, so they could get the same price- right?

ETA: Herbalife IS a pyramid- look it up. Amway is as well, but I don’t have personal knowledge of it. My uncle used to sell Herbalife- big big semi-scam, but not illegal, as not fraudulent. They tell you up front what is going on.

23

AFAIK, this is true of movie theaters too. The admission money you pay mostly goes to the movie studios. The theaters make their money on the junk food (and in all the big modern theaters, all the other “lobby” stuff too, like the pay-to-play video games, etc.)

I heard this from a friend, formerly employee of Atari, which has some connections to Warner Studios.

24

OK, MLM if you prefer. It relies on recruiting more and more people to the scheme in order for the participant to benefit. Unlike a Ponzi scheme Amway and Herbalife have actual products so don’t need that recruitment to sustain them, and losses are usually passed on to salespeople/recruiters who give up or don’t manage to recruit enough [del]gullible fools[/del] salespeople, but the rest is the same.

That’s not the premise of the company, that’s the alleged benefit to the consumer.

I belonged to a loyalty scheme in the UK called Nectar. It’s the largest loyalty scheme in the UK. To take your example, BP is one of the participants. Nectar only offers 0.5% returns on purchases. If 30-40% were feasible, why doesn’t Nectar do it?

In other words, how on earth can Lyoness offer up to eighty times more than an established loyalty scheme? What’s the actual premise of the company?

25

Okay, give me some quick facts. How many years did Madoff’s scheme operate before it collapsed? Next, how many years has Lyoness operated for?

Then please address the business’s association with BP. Would you say that BP and Lyoness are going to change the world? Will their impact be unforgettable? Will they explode onto the scene? Will they jizz a million barrels of tar into our precious oceans?

If the best thing you can come up with to say about them is that they are associated with Wal-Mart and BP, frankly, that makes me wonder if signing up with them might one day result in me being charged as an accessory to something. Once someone discovers the mummified remains of dozens and dozens of children ceremonially sacrificed to some dark God that had heretofore been forgotten since the Bronze Age.

Just saying.

26

ok, let me just start by saying…I was doing some marketing research, and stumbled on this forum. Since I knew the answer to the original posters question, I joined and answered. I have not tried to sell anyone here anything, nor I am trying to. That said I will try and answer these questions as best as I can by descibing the basic way the system works.

The basic premise is a “discount shopping network”. It was founded in July 2003 in Austria. Currently has 2M members across Europe and growing, and has now begun to expand in US,Canada, and Mexico. There website is Lyoness.com. There you will see all the vendors that currently have deals in place with Lyoness. I used Walmart and BP as examples, because they are well known.

The way it works is that Lyoness creates contracts with these vendors for discounts of 4-10% on average. 2% of those discounts go straight to the customer every Tuesday as cash back. The remaining discount goes into a loyalty account. The idea is to build the loyalty account in order to receive the benefits of the program(you are rewarded for shopping within the network).

Think of it this way…every month you spend money. On food, gas, clothes,etc… That’s a GUARANTEE. Its also a guarantee that you will continue to spend money on those same items every month, because you NEED things to live. So for example if you were to spend $2000 between the months of January, February, and March on items that you NEED. You would receive $40 back as the money was spent, and about another $675 in cash sometime in June or July. That is a 36% total savings. This is an example, it could happen faster or slower but the idea is that it will happen. And at no point have you spent a dollar more on anything you weren’t already going to spend money on. So as a consumer I don’t see where your risk is?

As a retailer I am offering a 5% discount (my margins can afford that). Meaning at the end of every month I cut Lyoness a check for 5% of the total sales of all Lyoness customers. I can also sign up my customers with Lyoness. When they receive a membership through my store, they become my customer for life. Whenever they shop within the system at any other Lyoness partner I will receive .5% of all there purchases. In addition my stores referrer will also receive .5%. As the system grows that can become an additional income stream. In addition anyone with a Lyoness card already will now become a new customer.

Now the question is sure to come how can a system pay 36% savings that is taking on average 7% discount from the retail shops. The answer is easy to draw on paper, but impossible for me describe in a forum. It is done with there accounting software. A system that has been ISO 9001 Certified and Tuv Certified by an independent firm. That basically means that it has been tested to ensure that there is always enough money in the system to pay out what is due, and the money is wired into your bank account.

You may be suspicious, and quite frankly I was too. No one is twisting your arm to join, but since you asked here it is.

Last points:
Unlike MLMs there is no attrition

Unique cash back program where you earn money from your own shopping and others

No annual fees

No drop out as people will always be shopping anyway

No product to sell

You can shop everywhere in the world and get cash back on your purchases

true passive residual income as people always shop

you can get paid on a national as well as continental level passively

income can be passed to family

no risk
27

There are countless scams and bad investments in any country in the world.

They are not pyramid schemes (in that there is an actual product being sold), but they are MLMs. In an MLM, you rely on recruiting others (who then recruit others) in order to make money. While there is also product being sold, the amount of money you make selling product is vanishingly small compared to bringing on new recruits to your network. This makes it ultimately a bad investment for anyone in an established MLM because the people making lots of money are the people who join first and recruit lots of people under them.

Whenever a company is selling a business opportunity more than its own products, be wary. They will attempt to court you that it is based on how hard you work, how much time you’re willing to put in, etc. but in actuality it’s based on how many people you’re willing to hard-sell into working for you for your benefit rather than theirs.

There are some MLM businesses that are actually interested in selling product, e.g. Pampered Chef and the like. It’s still not a good investment of money and time for everyone, but they at least are primarily interested in selling actual goods to you rather than bringing you in. Nonetheless you need a network of friends and acquaintances to get you started with selling, and unfortunately it’s very easy to become “that guy” who is taking advantage of personal relationships to make a buck.

28

intertile, you say this is “no risk”. I find this difficult to believe. Put simply, what have you invested in this program, and what have you earned, in actual numerical figures? What will you need to do to make an actual profit in terms of selling product rather than recruiting new people?

29

Yep, that’s the question. So the answer is easy to draw, but undescribable in words? Could you point us to a drawing somewhere, perhaps on a lyoness website? This must be some amazing software that generates $675 on 10% of $2000.

I happened to check the lyoness website, and found that there’s very little detail on how to join and how much it costs. I did find, in a PDF entitled “Lyoness Registration Brochure”, a chart that’s in no way easy to follow, that talks about “above” units and “below” units, and somehow magically states that once you get “35/35” units, you receive $675. However, it appears that to get these units, purchases must be done by “direct members” and “indirect members” - i.e. people you’ve recruited into your network. Which screams MLM.

I also found the following sentence:

“Jump start your Lyoness benefits with “Down Payments”
against a specific gift card order for future purchases.
The down payment is converted into units, which are
placed in your Lyoness accounting program.”

So what’s up with these gift cards? Do you have to order them to use at Lyoness merchants?
Why are they “future purchase” cards? Do they push the gift cards on people? Are the proceeds from gift card purchases used for the $675 payouts to previous members? Because this screams pyramid scheme.

I also found that Wikipedia, which has articles on things as trivial as the Billerica Memorial High School and the Desert of Maine, doesn’t even have a listing for Lyoness. Not even a stub. No article about the founder either. Almost as if they’ve been pressured not to have an article, in case anyone tries to put up negative information.

This all stinks to high heaven.

30

fluiddruid, my investment would not be relevant in that I am a retail store. There are certain expenses for a retailer. As a business owner I believe those expenses to be in line. A customer that comes into my store and purchases material can receive the card absolutely free with his/her purchase.

Again there is no product to sell. You simply need people to shop as normal. In my first post I said that you do need to bring people into the network, but you don’t need to sell them anything, and they don’t need to go out of there way to buy anything.

As far as my own profits, I can sit here and lie and give you this illusion of making hundreds of thousands of dollars, butI have no reason too. Again in my first post I said I was new to the system. I joined on February 27th, and my business should be online with the system by Months end. I have begun to see savings, but realistically don’t expect that I will profit from it for another 3-4 months. This is not a get rich quick scheme, it takes time. Do i know people making money from the system, of course. Some from Europe where it is more established…A few from the US (Florida), but I myself have just started.

Again, I’m not recruiting anyone here, I’m trying to answer your questions.

31

I’m sorry but this is just obfuscation. It’s done with accounting software? What’s done with accounting software? :confused:

Does the accounting software have a print function that just requires green ink and the right kind of paper?

Do us and yourself a favor and simplify this. Draw this - whatever - that is so easy to draw, scan it, post it on one of the free image hosting sites, and put a link here. Problem solved.

32

But you actually didn’t answer any of fluiddruid’s questions.

33

intertile, I know you’re not trying directly to recruit, but you are disseminating positive information about Lyoness, which is a standard online marketing tactic (I’m a professional online marketer) so you’re doing at least a little work for the company here.

The information you’ve posted talks repeatedly about the benefit to the consumer and completely glosses over the mechanism of the vast discounts that Lyoness appears to offer.

My question is how does it do this? How can it offer $675 back for a $2,000 spend - as stated, around a 36% return? Particularly given that standard loyalty schemes work off 0.5% back - maybe 1% sometimes.

Where does the money come from? It can’t be from standard bank borrowing, even if Lyoness is investing in 1-year Greek bonds. And there’s absolutely no way that major retailers are going to fund that kind of discount themselves, particularly huge ones like Wal*Mart where they are working on the most infinitessimal of margins. So that money must be coming from somewhere.

Where?

I have a theory on how it ‘works’, by the way, but I want to give you the opportunity to explain, without mumbo jumbo, benefit layering, or obfuscation, specifically how it does it. Thanks.

34

lol, ok this became a witch hunt real fast…and I’m soon to be burned at the stake.

I leave it at this: If I was saving money from shopping in a network, and I brought in 5 people that could also save money, and then they brought in 5 friends and so on and so forth…where is the problem? I’ve asked no one to buy anything, or spend money on anything they normally wouldn’t have. The benefits I described are done and generated for you automatically. Even if you never understood how it works, it is done for you by the accounting program.

If you really want to understand the accounting program, I’d much rather people got that information directly from Lyoness. There offices are located in the empire state building and I’m sure they would be more than happy to explain it to you. Rich, the director, is a very successful member that was recently hired by the company because of his success with the program.

If your interested or curious, good luck to you.
If your suspicious/think its a scam/think its a pyramid I understand, as I thought the same when I was introduced to it back in December.

My intention was to answer a simple question…that answer brought up a dozen more questions, and I tried to explain the system as simply as possible. Every other question here seems to be a ploy to uncover some elusive plot that doesn’t exist.

35

I think I answered his question directly, unless I’m missing something

36

There’s no need to be defensive. Personally I just wanted you to answer a few simple questions - which I’m pleased to say you finally have. Thank you.

That’s the classic definition of a pyramid scheme/MLM/whatever. The huge returns are predicated on recruitment.

True, but the chief problem with such schemes is that they’re unsustainable. Eventually Lyoness will collapse in on itself, and anyone who still has money in the system at that point will lose it to the creditors. It might not happen for a long time, but it will eventually do so unless it changes its business model.

You did, finally, but it took a lot of ferreting.

Such a plot does clearly exist now you’ve been explicit, it’s just you don’t want to define it as such.

37

Every question here has been an attempt to get past vague buzzwords and buzzphrases. You seem to be upset that people want to know how much they’ll have to invest, how much they can receive in return, and how this is accomplished, but you have to understand this forum isn’t one of those already filled with people looking to join up.

38

:smiley: !

39

Thank you, that’s really helpful and easy to visualize. It feels like it would lend itself really well to some sort of visual representation… Like if there were a chart that showed you at the top, and the 5 people you brought in below you, and then the 5 people they each brought in below them… I think that would help show what Lyoness is all about.

40

A cube? A sphere? Truncated dodecahedron? It’s all too much for my fluffy little head. :wink:

What I need to help me is some whizz-bang accounting software. Preferably made by boffins in laboratories.