Yep, those at the top of a pyramid can really clean up. Those at the bottom have only hope as they feed more money into the system. Those in the middle? Well, they’re in the middle.
If you don’t realize this is a scam, then you’re part of the scam.
Prove it. Can you link to any kind of vetted financial report?
Using intertile’s numbers from earlier in the thread, his business sends Lyoness 5% of every sale. If that’s typical, then that $3B in Lyoness revenue represents $60B in purchases by its members. I really doubt that.
Please read this thread and look at the math. Where do they come up with the money to fly their members around?
Are these all just gift cards or member cards that we could get from the store without having to join Lyoness? Is there a list somewhere?
Cite?
If you “do things honest and true” you shouldn’t be promoting a pyramid scam. Please disclose your relationship with the company. Are they paying you to do this?
Looking back to the beginning of this post, you said they had $3 billion in revenue. With 2 million members, that means Lyoness is making $1,500 from each member every year AFTER paying out all of these bonuses. I don’t believe it.
All ISO9000 means is you adhere to the procedures you’ve written for yourself.
Any scheme or scam can be audited, pass, and get a certification - given that you dont make your internal procedures too difficult to track between departments.
Self-admitted pyramid scheme.
Not to support Lyoness in any way, but you are confusing revenue with gross profit.
Pardon me. That should have said before paying out the bonuses. My mistake.
(I still don’t believe it. Not even close.)
I’ve read some replies in this forum and i’ve seen a lot of unanswered questions.
It’s very difficult to answer some issues in a public forum. Also it’s very difficult to answer questions in a theoritical base. I’ve seen people assuming or trying to imagine things that will happen in the future.
Well i will tell you one thing. I have registered 2 of my companies and use this Loyality program. There are a lot of clients coming in and this is true. In Greece there are more than 800 companies registered and accepted this loyality program. I see lots of satisfied customers and satisfied customers. I had the chance to meet other company owners and establish professional relationship with them. So don’t just read and accept anything you see on the internet. Ask people that are using this Loyality Partner Program.
Personally for me is a great marketing tool and a good chance to earn some more income from people or customers you already have in your circle.
Please don’t hesitate to contact me. The conclusion is that here in Greece, the results are more than satisfying and i can share with you the numbers for my companies and I.
Regards,
Mike
(RunnerPatted the phone number/email address.)
The unanswered questions are all gaping holes in the Lyoness programme that proponents/spammers cannot answer truthfully. There are no “theoretical” questions that are difficult to answer. The basic math does not work in ‘members’ favour.
I do not believe anyone in this thread has challenged the idea that merchant participation in Lyoness is part of the pyramid scheme. It is a cost/benefit for the merchant; what is the cost of participation versus buying advertising on a billboard, radio, etc. By being a merchant participant, it is possible to sell products and expand your market base to a collection of particularly gullible people; Lyoness members. By profiting off members’ inability to do basic math, it is likely that in the long run you too will be able to scam them similarly to Lyoness.
I hope you allow me to disagree with that, because i was a member before becoming a registered company. I decided to join the Partners’ programme after i got the first money back (within 4 months). What i did was only doing 25% of my and my companies shopping through other partners and quickly i understood that it worths joining.
I agree with you in this part.
I really don’t believe that. Or else it’s like calling our own customers nobrainers… as in our companies we register our own clients for free and we explain how the system works.
Anyway, just wanted to say that members and merchants have nothing to loose on that, on the contrary they have a lot to earn. Some people/merchants earn more and others earn little or nothing. But it depends on how you implement this tool to your business or life. I personally believe it’s a tool and it depends on how well you know how to use it. It’s not a simple tool though… you need to check the manual carefully in order to know its proper use.
I’ll be happy to answer any questions you may have, but i prefer not to discuss in a public forum, because it’s against the rules as i know and since for us it has been a useful tool, we don’t want to have any problems and we respect that.
If you mean Lyoness’s rules, that says everything we need to know.
I know I’m late coming into this thread, but I feel the need to point out that I know for a fact that at least one of these companies has absolutely no affilliation with Lyoness whatsoever. None, zip, nada. I would have to guess that’s probably true of the others as well. Just because somebody is buying and selling another company’s gift cards does not mean they are “working with” said companies. They’re simply using gift cards as their chosen form of currency within the pyramid.
I have nothing further to add that hasn’t been coveed by other posters, but I hate to see legitimate businesses being tainted by a perceived association with this scheme because they’re offering up particular branded gift cards.
Carry on.
I just checked our rules, and we have no problem discussing it here out in the open where we know everyone would get the same answers, instead of using private email where it would be next to impossible to compare notes and/or promises. If it is against Lyoness’ rules(and I can’t seem to find that particular rule anywhere on their websites), would you mind if we reprinted your responses in this thread for the purpose of keeping facts straight?
Here’s one that few Lyoness proponents have answered: After the tumult and shouting has died, how much money have you made with it?
Love a duck. No wonder I’m not rich.
Also, if it’s Lyoness’ rules you are worried about breaking, that would indicate that you are an employee of the company, not a customer.
I’m convinced. Costco all the way for me.
It’s already been shown that it was a pyramid scheme, so there’s no need to pile on with specious arguments: the fact that Lyoness makes any rules secret doesn’t have much bearing on their legitimacy. Probably every Fortune 500 company has entered into at least one secret agreement or NDA, and more likely, hundreds/thousands of them with employees and clients.
I know I helped engender that atmosphere with the post about the Empire State Building, but I figured the math dust has already settled, there’s not much more to discuss.
Hi everyone,
I’ve just been doing a bit of Lyoness research and found this thread so felt compelled to share some of my understanding of the system which may clear up some issues. I considered a number of these things prior to signing up with Lyoness and so hope to share some of my insights.
2 Types of cardholders:
Bluecard holders are your basic lyoness ‘consumer’. These are the cards that a SME business would hand out to their customer base, or you might hand out to your friends. These consumers sign up there bank details and are compelled to shop within the loyalty merchants to receive their 1-2% cashback. 1-2% doesn’t seem like much, but considering as the program grows and more points of acceptance / merchants get on board, 1-2% across a wide number of your typical shopping destinations starts to stack up. In other countries where a number of merchants are on-board you are receiving 2% cashback when you buy groceries, fill up petrol, buy clothes, download songs on itunes, hire a car… whatever the purchase is. The average ‘shopper’ using the Lyoness card is spending around $1000 a month in the UK, which is delivering them $20 in cashback every month. $240 a year. Not alot but definately worthwhile, if you can imagine a typical ‘store’ loyalty card where you only receive 2% back from purchases at that store, you would have to spend $1000 at that store only to eventually receive a $20 bonus.
On top of this blue card holders hand receive an additional .5% on purchases made through cards they hand out to their friends. This is called the friendship bonus, and is there to encourage the spread of cards. So using the financials above if I am a bluecard holder spending $1000 /mnth, I am receiving $20 in cashback per month from my own spending. If I were to hand out 5 cards, and those 5 people were spending $1000 / mnth, ($5000 a month spend total), I am receiving .5% of that which is a further $25 a month. Remembering these people are only shopping at typical destinations and you are not ‘selling’ anything to your friends by giving them a card. $45 a month is $540 a year… Enough for a couple of nights at a nice hotel for you and the wife, or christmas presents for the kids. It’s a worthwhile thing to do. If anyone is questioning the $1000 spend, just tally up what you spend on groceries & fuel monthly and that is a decent indication of somewhere you might ‘change your point of purchase’ to a loyalty merchant because you know you are getting something back.
There is 2 levels of friendship/referal bonus’s - direct and indirect. Which basically means if I give cards to my 5 friends, and they give cards to their 5 friends, I am making .5% off my friends spend, and another .5% off their friends spend. So between me, my 5 friends, and each of their 5 friends, we now have 31 people in my ‘group’ spending on the system. If each of them are spending $1000 a month, this represents a collective group turnover of $31,000 a month, or $372,000 per year.
I’m receiving 2% cashback on my own monthly spend ~ $20 a month, and .5% cashback on my friends and their friends spend… so the maths is 30x$1000 = $30k *.5% = $150 per month in friendship bonuses or $170 per month total from my cashback and the cashback i receive from my group. This equates to $2040 in CASH from using the card and refering some friends to it. You are not going to retire on $2040 a year, but foreseeably this is easy enough to obtain and the system is setup to encourage referal to friends.
To calculate my total return on spend from my little referal network and the fact I am using the card - I am spending $12,000 a month through the loyalty merchants, but am receiving $2040 in cashbacks. Why is the return so high? Because I am making a cut of OTHER peoples spend too! My return on these calculations is 17%. I believe the maths that people have been applying in this thread is illogical, because they are saying, if I spend $1000, and the merchant is repaying $70, how can lyoness be giving me $170? You are not taking into account the bigger picture of the bonuses for referal etc! The $170 is actually only a small portion of a group spend of $31000 / month, so you need to apply your maths to that.
One thing to note here: With the above mentioned loyalty merchants, whomever it might be, the negotiated discount is higher than the cashback component of what is being returned - so $2040 only represents a small portion of the total negotiated discount that is being refunded to Lyoness for the retail spend. The typical breakdown is 1% goes back to Lyoness for administration, at least 1% in cashback to the shopper, 1% in friendship bonus’s (.5% to the person who referred you and .5% to the person above them), and then the remainder is ‘loyalty credit’ which accrues within the Lyoness system, which can be spent within the network. So depending on the deal Lyoness has made, lets use the typical 7%, - 1% to Lyoness, 2% Cashback, 1% friendship bonus’s. This uses up 4%, and leaves us with a further 3% which accrues in the Lyoness’s bank account as loyalty credit. As a blue card holder / consumer you do not have access to this extra money.
Gold card holders:
Gold card holders are your typical ‘distributors’. Someone who is getting involved in Lyoness to build a passive income stream and is more motivated to not only get ALOT of cards out, but also access the extra cash in the above mentioned 3% that a typical consumer doesn’t receive. There is a basic requirement of having around $3000 loaded into the ‘accounting system’ in order to be able to be able to be classed as a ‘distributor’. Remember that money that enters the the ‘accounting system’ is only the extra portion of the negotiated discount… in my above example that is 3%. So you can become a distributor by paying Lyoness $3000 to put straight into the accounting system, or you can gradually become a distributor by waiting until you have accrued $3000 from your own spending. At 3% this represents you having to spend $100,000 within the network in order for the money accrued to get to that level. You can become a distributor by paying lyoness less than $3000 and then letting the rest accrue through spending but in my mind its easier just to pay the $3k if you want to get serious about it.
If we use my above example of me with a card handing out to 5 friends and they hand out to their 5 friends - but we exchange me being a blue card holder to a gold card holder or distributor with access to the extra 3%, you can start to see where there is alot more money in this system.
31 people with a collective turnover of $31,000 / month shopped through Loyalty Merchants. If we use 7% just for examples sake (discounts vary), the total rebate to lyoness on that spend is $2170. Of this I am receiving $170 cashback ($20 from my spend, $150 from the spend of others). My 5 friends in total are receiving $100 in cashback from their spend (5*$10002%) and $125 in friendship/referall bonus’s from the people they referred (25$1000*.05%). The group of 25 whom are my friends friends are each receiving $20 cashback from their own retail spend, but assuming for the purpose of this exercise they haven’t referred anyone else, we are looking at a collective $500 being redistributed in cashback to them) (25*$1000*2%). So if we total that up we have $170 + $100 + $125 + $500 = A total of $895 being redistributed through the Cashback system. Lyoness is taking 1% so $310 = $1205. There is $965 still sitting in the Lyoness system that you have access to a portion of through the maturation of your and others accounting units. Trying to explain the matrix is complicated but not mathematically unsound. Basically of the $965 in your group of 25s spend you would receive only a couple of $75 units of it as it is allocated out as units into several peoples accounting programs.
In terms of business looking to capitalize on this opportunity? If you are a small retailer seeing 100 customers a week, you have access to consumer flows. The opportunity is to turn your business into one that not only sells its product or service, but distributes cards and builds passive cashflows from the spend on those cards. If you see 100 customers a week, you convert 30 a week of those onto cards, and half of them go on to actually use the card you are looking at getting 780 cards out per year. If they spend the average spend being now experienced in the UK for cardholders ($1000 a month), that group will have a collective retail spend of $780,000 a month. $9.36m per year. Of that $780,000 a month the referrer, or the business makes 0.5% in cashback or $3900 per month. Obviously this is only the tip of the iceberg as the trend in europe is that the typical cardholder that is using the system/card is referring on average 5.4 friends - which applied to the above business would mean the foreseeable potential of the cashback is that 780 people becomes 4992 cardholders with a retail spend of almost $60m per year of which the referrer would receive $299k in cashbacks. This is before you start looking at the loyalty cash accruing in the system.
Obviously such numbers are dizzying to even consider, and need to be approached with a degree of realism. But suffice to say, the collective retail spend of the masses IS dizzying, and when you put pen on paper about how much a group of even 30 people is spending per month on groceries/fuel/travel/purchases you start to see that this system is a plausable strategy of just taking a mere small percentage. I’d rather have a small percent cashback of everyones purchases than a large percent cashback of my own.
I didn’t read you post, but I’ll just ask the one burning question…how much money have you made? That’s really all it comes down to. How much extra cash is in your pocket that wouldn’t be there if you didn’t sign up. No beating around the bush, no skirting the question, just push Shift+4 and then enter a number and hit “post quick reply”.