Experiences with Lyoness? Scam?

Factual Questions
141

Thanks for this cogent summary, lionless.

I take very minor exception to only one of your points: “it isn’t a scam”. The word “scam” doesn’t have any legal definition, and I think it’s perfectly feasible to have an opinion that something is a scam, even if it keeps within the letter of the law - e.g. default credit swaps. I agree that it’s not a ponzi scheme, but it does appear to be an MLM which hides its true nature through multifarious obfuscationary tactics. Unlike other Lyoness “hatas”, I would imagine that it is operating perfectly legally.

142

Fishing with Dynamite just read your progress on the boards.ie thread. Extraordinary work! Well done. Suggest you get your evidence together and get in contact with the Retail Sector newsdesk at the Irish Times.

143

Yeah, it probably depends on everyone definition of scam. I more define this lyoness scheme as a sucker game. However the chances of making a buck with lyoness is IMHO far higher than for example casino or lottery - which again may or may not be defined as a scam by some people. But I think it is better defined as a tax on stupidity.

My friend seems to actually “earn” a lot of money (I don’t want to bring this up with him anymore because I am not interested), but he is in Austria and I remember he was trying to recruit me year after year, some years back (I never pay much attention to those things, I hate MLM) so he would be on it some time and now it seems he got his “jackpot”.
I just never play sucker games, same as I never buy lottery tickets or don’t gamble. But there is sucker born every day and if you look at places like Vegas - there is a lot of them.
The MLM aspect repulse me regardless if it is health insurance, dish soap, fragrance or gift cards. It sucks a big time as a social thing, sadly not everyone realize this.
It would be totally the last thing ever for me to go to friends place and ask him “Would you like to earn some money?”. Ugh, I would feel so low.

144

Hi JJiimm. Thaks for the kudos. But so far all I have really done so far is A) Get sucked into the scheme like a mug; B) Manage to get them to return my money to me; and C) Post only some of what I have learned in the process.

I have recently been busy renovating my house so I haven’t really been able to particpate in this debate to the degree that I would like. Hopefully though I can add further contributions as and when I can get around to it on www.boards.ie. As regards contacting the Irish Times, or any other form of national Media, I possibly will in due time. But I don’t want to do it just yet as I am still in the process of piecing it all together and I would like to have some real damning evidence or information that would make it very difficult for Lyoness to weasel its way out of before I waste valuable bullets.

Regards, FWD

145

Lets just do quick and dirty math from the blurp, 2 mil users, revenue 3 bil/year, if we assume the average discount is 5% that means directly this would be 2 mil people spending 60bil euro which is in average spending 30k per person - on a gift cards purchase a year. (Or in terms of total revenue 1500 arbitrage/discount money per every person per year)
That is obviously off as a discount scheme so it means the vast majority of this 3 bill revenue must be funded through the sucker game and downpayments.
Yep, if you pay whatever the membership or put downpayment or whatever, you practically funding this 3 bil revenue. I am sure it made a lot of multimillionaires from the owners on the top. It is pretty sick how much money you can get from people.

146

Remember that’s not their only source of income. They also have the buy-ins from businesses – intertile mentioned earlier in the thread that it cost his business US$3,780 to join. Presumably, they also invest the money that they are holding until members earn their full “matured” units – and keep the profits.

147

I am in the process of joining. I have done a lot of math to verify that their scheme is in fact sustainable. It is. They payout some but not all of the money they take in. I am not sure where the 36% came from, but I can tell you this. The big “bonus” $875 on your $1071 purchase does not come until you accumulate around $75,000 in retail activity below you. You are not getting paid based on your purchase alone, but based on all of this activity, so it is actually about 1% additional payout not a straight “36%” percent (wherever that number came from).

This is actually sustainable because even if everyone gets paid out on everything, Lyoness will still pocket about 15% of the amount “Loyalty Credit” that they received from the retailer. The retailer paid 10% to Lyoness. Lyoness paid 1% to the purchaser immediately plus 0.5% to the two people above the purchaser. Then Lyoness would eventually payout about 85% of the remaining 8% if the requisite $75,000 in sales accumulate in the purchaser’s downline. This would take a long time, but if it eventually happens, it would work, and it is sustainable.

A similar calculation works for their recruiting scheme. They only payout a percentage of the overall activity, so they always have enough money to pay what might come due.

148

And we have another…

149

So how much have you made so far?

150

Is this anything like Groupon, which I don’t understand either? (side issue - irritation at ads that don’t give any information: first ad I noticed for “Groupon” had that word, and a pastel colored hamburger, that’s all. ??)

151

Having an office in the Empire State Building doesn’t seem to mean much these days. Word on the street is that it’s terribly antiquated and the floor layouts aren’t compatible with modern offices. This drives rent very cheap.

This NY Times article reports that the building makes more revenue by charging fees for the observation deck, than from all rent combined - $62.9M against $62.6M.

In this Reddit discussion about that fact, the top comment is someone figuring out that the ESB must either be near-empty or only charging 1/10th the normal Manhattan rent. I grant that these are all just some guys on Reddit but here’s some other posts from that thread:

[QUOTE=Reddit user Xynga]
I work there (well,my office is there but I am only there for a few weeks a year). The rent is a relatively cheap. The building itself is crap but the views are ridiculously awesome. I am on the 68th floor.
[/QUOTE]

[QUOTE=Reddit user THE_PUN_STOPS_HERE]
It’s a terrible office building that very few legitimate businesses want to have offices in.
[/QUOTE]

[QUOTE=Reddit user WhiteRaven42]
I worked for a company that was based there for a while… Music of Your Life LLC.

Didn’t even resemble a legitimate business. I had more than one paycheck from them bounce.

[/QUOTE]

[QUOTE=Reddit user scottperezfox]
That’s because Empire has no light and horrible interior layouts. By modern standards it’s a crappy office building. No company wants to be at that location — overrun by tourists and surrounded by overpriced souvenir shops — and pay those rents, and yet still have to sit among narrow windows and random beams.
[/QUOTE]

I had heard this stuff before but the Reddit discussion was fresh on my mind when I read this thread, so I figured I’d jump in and share it. Supposedly all the premium that’s left in renting at ESB is so that you can have a The Empire State Building address and impress your clients, so lots of businesses otherwise lacking credibility get tiny offices there just to get mail.

152

According to Wikipedia, Groupon works as a collective to form group discounts. They make an offer for a discount from some company on some product, but only commit to accepting the offer if enough people agree to use the discount. The Groupon site advertises to its members and collects their agreement to use the discount, which when the threshhold is reached means everyone who elects the coupon can use it. Then Groupon and the vendor split the revenue from the deal.

The theory is that the vendor will get a much wider client base who will then return for service on a regular basis without the discount. In practice, this is not necessarily working out that way.

This is different from Lyoness is a couple of ways. Primarly, there is no pyramid scheme here. Nobody earns discounts based on the number of other people they get to pay up front money. Nobody pays up front money. You simply get a coupon, and use the coupon for a service at a discount. And maybe sign up for advertising from Groupon.

Second, the discounts Lyoness get from big retailers appears to be their standard either discount for bulk gift card purchase, or standard web retailer affiliation. Neither of these really fits what Groupon is doing.

The third element is the discounts Lyoness gets from small retailers - the mom and pop stores, gas stations, etc. - the one-off retailers. They seem to offer up larger discounts for card users. This element is most similar to what Groupon is doing. Except Groupon is not hiding there methods behind layers of confusion and obfuscation.

153

Say a friend pitches the hard sell, and I decline. But if I understand correctly, he gets some kind of immediate discount, and rebates down the line on purchase totals. So I could offer to let him make future purchases for me with his Lyoness card and give me the discount price. He could keep the future rebates for himself. This would also show how easy and how much purchases/discounts are without commitment on my part.

In fact, why the “recruitment” ceremony at all?

154

Here’s my understanding - in a traditional retail arrangement, the retailer has to guess at how much inventory to buy, and it pays to be very good at that. You don’t want to run out, but you don’t want to store stuff long. That costs money. Therefore traditional retail has low profit margins even though the markup is very often > 100%.

With Lyoness, the retailer is getting the money to buy the inventory up front. They still don’t know exactly what products to buy, but they already have your money. You are paying them to acquire inventory. They can’t lose with that money. Either you buy it - fine, or you don’t - fine. You paid the money.

Retail does have big markups but low profit margins. If you give them the money up front, they are willing to cut deeply into their big markups but still come out ahead, because so much of the markup comes from needing the capital to have inventory.

155

Lyoness is a legitimate corporation that was founded on July 2, 2003, and they are currently in 34 countries in Europe. They are very successful and did $3 Billion in revenue last year. They recently launched in Asia, the Middle East & Africas, USA, Canada, Mexico, and Brazil. They are already in Dubai. The company is growing and doing quite well.

They are opening a customer service center in Florida right now and opening another office in the USA right now as well. Regardless of whether or not their office in the Empire State building appears to be aesthetically pleasing is a moot point. The Empire State building is old, but it provides a good reputation in the USA. The founders of Lyoness are from another country and fly here all the time and are expanding and spending quite a bit of money setting up more offices and helping members and employees expand with high quality.

They fly their members overseas often and have top-notch conferences and serve the best food and it’s nothing short of a class-act company. It is nothing at all like Groupon, or anything else that exists that you have seen before. It’s not a coupon site or discount site, either.

When you become an Associate (a premium business member), your down payment is applied to future shopping. This means Lyoness takes your down payment on future shopping and buys gift cards with member merchants (VERY well known ones!) and then Lyoness members buy these gift cards to show the merchants we are LOYAL to them and will only shop with them. These are Fortune 500 companies who spent a long time looking into Lyoness and would never have become a member if it were not 100% legitimate.

We can now shop at hundreds of stores online, and thousands in Europe, and the list in the USA, Canada and Mexico is growing each and every day.

You will soon be able to get a free cash back card, which is not a credit card and you don’t even need a bank account to use it. The merchant agrees to pay (the customer) Lyoness cash back because we have free, loyal shoppers. Lyoness only keeps 1% of it and builds schools in impoverished countries for needy children. The rest goes to the shoppers.

Lyoness is ISO 9000 Certified and passed all the USA regulations over a 2-year period on 2009 and 2010.

If you want a free cash back card, they will be out soon. When they are, right now, you can shop online. Soon, you will be able to download their mobile application and shop in Lyoness member stores (See Lyoness.net for the member merchants), and later on this year, the cards can be used to shop in stores.

Sound too good to be true? It’s not. I am the biggest skeptic of anyone, and I just resigned from a middle, 6-figure annual income position to do Lyoness BECAUSE it’s legitimate.

How do I make money? I find people who want to give out FREE cash back cards to consumers who want free money. I make a small percentage from their shopping. You can do the same thing. In a couple years, when you are in one of the big “superstores” and you see someone swipe a Lyoness card, you will know the person who gave them that card just got money deposited into their account through Lyoness because they are a Loyal shopper, too.

Got questions? Feel free to reach out. I am a legitimate person who does all things honest and true and thought I should let you know what Lyoness is REALLY about cause they are amazing people with a wonderful business model helping over 2 million members, going on 5 million in less than 2 more years worldwide.

God Bless,

Adrienne

156

If you read this thread you cannot come to any other conclusion than that Lyoness is a form of pyramid scheme. That it makes money for its owners is irrelevant to whether or not it makes money for the multitude of people stupid enough to fall for its marketing pitch.

If you say otherwise, you are either too stupid to follow basic math, an irrational dreamer rhat makes Ralph Krandom look astute, or a paid shill for Lyoness. Note the coincidence of two posters finding an otherwise dead thread.

Scam.

157

“Rhythmdvl,” you are certainly entitled to your opinion. I am sorry you chose to call others names in the process. Lyoness and its founders, as well as its happy and loyal members speak for themselves – to those who are interested. Thanks! :slight_smile:

158

Math is not an opinion.

Lyoness is a scam.
See upthread for a thorough analysis of why Lyoness is a scam for anyone but its owners, advertsers, and a tiny minority of members.

BEWARE shills using message boards to bilk customers. Lyoness is a pyramid scheme.

159

  1. True, there is nothing useful to North / South Americans. *** Yet.***

  2. Thankfully, Lyoness has their best people on it. Even as we speak there are representatives of the Benevolent Lyoness attempting to make inroads into the American market (for our own good, natch). Why, we’ve seen those munificent efforts right here in this very thread!

  3. One way they are attempting to do this is by using… friends… to “advertize” Lyoness’s mysterious, yet wonderful, benefits on internet message boards whose users are mainly North and/or South American. Boards like the SDMB. But we are in luck! At no point have these friends tried to sell anyone anything. Of that we have been assured (over and over again). Have you heard the Good News?

  4. I don’t have any formal training in Advanced Matrix Lyonessology, but I would guess the strategy of the Lyoness “Sea Org” is that once this fabulous money-making… uhhh… “money-saving” opportunity becomes known to the consumer masses, the demand for our favorite local retailers to join the Lyoness Double-Helix Matrix-Accounting Borg-Ware will be so great that soon we North/South Americans will have plenty of opportunity to save thousands of dollars on hundred-dollar purchases right in our home towns.

  5. Profit!

160

And the vikings sing…