Lyoness Pyramid Scheme: Scam or Legit?
Lyoness Reviews [year]: Best MLM Compensation Plan?
Websites or businesses that provide cashback are getting more popular these days. It's understandable. Who doesn't like to receive a little amount back when they shop?
Shopping points and earning cashback seems like fun, doesn't it?
Perhaps this is one of the reasons why it has gained popularity, and perhaps it is also the reason why Lyoness, a network marketing business, is causing a stir online.
Essentially, this business provides cashback solutions as well as the ability to earn money by sharing this platform. But, before you go into the program, make sure you understand the key points that will help you determine if it's the appropriate program for you.
DISCLAIMER:
This Lyoness review has been thoroughly researched with information and testimonials that are available to anyone in the public. Any conclusions drawn by myself are opinions.
PROS
CONSWhy Listen To Us
My name is Josiah, and this is my Dad, Joel.
Together, we make up the team here at Scamrisk.
If you’ll let me bother you for two minutes, I’d like to quickly explain why I’m even here writing this review.
In early 2020, I had just graduated from college & had no real career prospects.
I knew I was destined for something more, but I had no clue how I was going to make it happen.
I had this sinking feeling in my gut all the time… like the “big man upstairs” had accidentally given me the version of life where I’d be mediocre forever, instead of the one where I was, ya know – happy & fulfilled.
Anyway…
I had fiddled around with some different online businesses in college:
Some random MLMs, a bit of affiliate marketing, a (failed) dropshipping store or two, all the usual suspects.
Even my dad had been involved in MLMs back in the day… selling knives & other random nonsense people (probably) didn’t need.
All I really wanted was to find something that was going to actually work for me.
Maybe those things had worked for others, but for me it all turned up a fat “0” in the bank account department.
So I searched! And searched… and searched… and searched…
And eventually, I somehow stumbled upon a program that promised to help me build an income online (read about it here if you’re curious).
I didn’t really want to be “rich”.
The thought of making a reliable $5K per month & not having to worry about clocking in to a 9-to-5 ever again was all I needed.
Sure, there were people in the program doing high-6 and low-7 figures per year… but that wasn’t what I was out for.
I just wanted to provide freedom for myself, and if I was lucky, take my family along for the ride.
Fast forward a few days and a few phone calls & I was enrolled!
Here’s the first “money making website” I put up:
I built that site in 2020, and it still makes me $1,500 per month. It’s a basic 5 page website I built based on a template the program provides.
The best part to me? My dad and I get to do it all together!
So between the:
Ease of reaching $5-$10K per month in income online
Straightforward-ness of the system to do it
Fact that I get to do it w/ my family
Is why I recommend local lead generation as my #1 business model for making money online.
Sure, it takes some work and dedication – but anyone that tells you that there’s a business out there that requires no work is selling you a lemon.
I’m not saying you need to sign up for the same program I did, but I would definitely recommend giving the business model a peek!
What To Expect From This Lyoness Reviews
This review will go over Lyoness to see if it really is the best MLM course out there.
You'll learn whether MLM is the right online business for you.
And at the end, you'll find answers to some of the most frequently asked questions regarding Lyoness and MLM in general.
But most importantly, you'll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.
This system made them swear off MLM for good because it uses some of the same skills but in a much more powerful and profitable way!
What Is Lyoness (Cashback World)?
A worldwide shopping community, Lyoness operates on a Network Marketing concept.
It claims to have a membership of more than 8 million people.
It is presently operating in 47 countries on six continents.
Lyoness is being investigated in many countries for being a pyramid scheme.
The Italian Competition Authority (AGCM) decided in January 2019 that the Lyoness cashback formula is an unfair and deceptive commercial practice.
Also, there are a few points I'd want to explain so that you can see the whole picture.
Lyoness is a registered trademark for a collection of geographically dispersed business entities.
This implies that Lyoness encompasses a lot of distinct brands.
Their primary brand and platform for connecting consumers and merchants are Cashback World. (and, of course, to provide cashback to shoppers)
Lyconet is the brand under which they conduct all of their network marketing business operations.
Cashback Solutions is where merchants may sign up and become Lyoness members.
What Is The Lyoness Corporate Structure?
Hubert Freidl, the CEO of Lyoness, was appointed as the company's director in 2004. Lyoness is made up of at least seven Swiss companies, nine Austrian corporations, and roughly 42 other national and regional corporations from across the world. The name "Lyoness" comes from the Celtic legendary realm "Lyonesse." In 2014, the term "Lyconet" was introduced as a new trademark name for the same group of companies.
Check the new Lyoness website: https://www.lyconet.com/us
International Organization
Lyoness and Lyconet are trademark names that encompass a variety of business forms. Lyoness eBiz GmbH, Lyoness Dataservice GmbH, Lyoness Lyco Soft GmbH, Lyoness Child & Family Foundation, Lyoness Greenfinity Foundation.
Continental and country organization
The continental organizations are registered as stock corporations and are subsidiaries of Lyoness International AG. Lyoness Europe AG (established in 2003), "Lyoness IMEA S.A." (formed in 2009), Lyoness North America Ltd., "Lyoness South America S.A.", and "Lyoness Asia Ltd." (2011).
The country offices are privately owned, limited-liability companies that are subsidiaries of the continental stock corporations
How Does Lyoness Work?
Lyoness provides many advantages to both consumers (online shoppers) and merchants. However, for the sake of this Lyoness review, the focus will be on the Consumer's side.
As a Lyoness member, you may earn a 1% to 5% cashback incentive when you buy online at one of Lyoness' affiliated brands and merchants.
You will also collect Shopping Points when you buy anything from one of their partner shops. These Shopping Points may be used for offers available just to Lyoness members, such as cash bonuses or discounts.
Aside from personal discounts, you may also earn money when your recruiters and their recruits buy online.
Can I Make Money Online With Lyoness?
Yes, You can make money online with Lyoness!
But...
There's a lot that comes along with Multi Level Marketing that many people struggle with.
According to a Lyoness 2017 income disclosure statement, the typical Lyoness member in the United States earns about $275 in gross yearly commission. That works out to be just $23 each month.
If you believe that's a negative thing. Just wait till you hear this!
According to the same document, 46% of Lyoness members get no commissions.
When you consider the typical yearly expenses while conducting a company, some of them even lose money. What if those individuals are premium members?
To make things worse, comparable numbers may be obtained from a separate Lyoness revenue declaration for Lyoness affiliates located in Canada.
With these figures, it's no surprise that many people are labeling Lyoness a scam online.
Now, don't get the wrong idea...
It's not impossible to make money online with MLM, but if you're gonna put in the amount of grueling work to do this business (which, trust us, isn't easy), you might as well bring in some REAL money while you're learning the ropes.
How Much Did Lyoness Members Pay To Join?
Lyoness, like GPT sites, provides free membership to online shopping. However, as a free member, you will only get a limited range of advantages. This will be explained more below.
Lyoness provides a few of upsells if you want to become a premium member, and yes, you must pay money.
Some individuals on the Internet claim to have paid more than $3,000 to get a premium member status with Lyoness in the hopes of receiving greater benefits, incentives, and privileges.
Is Lyoness An MLM Company?
Lyoness is an online shopping platform that operates on the basis of a multi-level network marketing business model. It is similar to another MLM company known as SHOPPING SHERLOCK who uses the same business model.
Is Lyoness A Pyramid Scheme? Is Lyoness A Scam Or A Legit Business?
Because Lyoness lacks a tangible product and the only method to earn money (apart from the cashback) is through recruiting people, it's very debatable if Lyoness is an illegal pyramid scheme.
At least by definition...let me be clear though...I am NOT personally calling it a pyramid scheme.
Here's the deal...
In several countries, Lyoness is accused of being an illegal pyramid scheme where it operates.
Lyoness has been deemed an illegal pyramid scheme by four independent civil courts in its native country of Austria.
The Austrian Economic and Corruption Prosecutor ("WKStA") has also completed criminal investigations, claiming that Lyoness runs an unlawful pyramid scheme.
Sweden, Poland, France, Hungary, Lithuania, and Greece are among the nations that accuse Lyoness of being a pyramid scheme.
Lyoness is already prohibited in Norway, where the Lottery Authority determined it to be an unlawful pyramid scheme.
However, things are much more complex than that...
Following the additional inquiry, the Federal Court determined that Lyoness is NOT a pyramid scheme
Here's a possible angle:
Because of the many complaints and lawsuits filed against Lyoness, they have shifted all network marketing operations under the Lyconet name.
They've also altered their policies and procedures. You used to have to pay a fee to join Lyoness. However, it is presently free to join Lyoness and get rewards as a customer.
After all of these modifications, the Federal Court can no longer refer to Lyoness as a pyramid scheme.
However, it remains a very contentious business that you should think very carefully about before joining.
Do you still believe Lyoness a scam? Is it, in your view, worthy to invest money in?
It is entirely possible to build a profitable, successful MLM business... But there are better ways to build a business other than with MLM.
What Is A Pyramid Scheme?
A pyramid scheme is a dubious and unsustainable business model in which a few top-level members recruit newer members. Those members pay upfront fees to the people who enrolled them. As newer members recruit their own underlings, a part of the subsequent fees they earn is likewise passed up the chain. These activities, known as the "pyramid schemes," are banned in certain nations.
IMPORTANT TAKEAWAYS
1. A pyramid scheme is a kind of plan that channels revenues from lower levels of an organization to the top and is often linked with fraudulent activities.
2. The overwhelming majority of pyramid schemes make money by charging recruiting fees and seldom include the sale of real products or services with inherent value.
3. Multi-Level Marketing (MLM) operations are similar to a pyramid scheme in nature, but they vary in that they include the selling of real products.
4. In 2008, Canada was overrun by a massive pyramid scheme, prompting a class-action lawsuit against the organization, which was forced to shut and refund money to disgruntled participants.
The simple answer is yes, a pyramid scheme is illegal in many nations, and several governments have developed their own legislative framework that criminalizes scheme founders.
Various states have different regulations in place to prevent individuals from being duped by a pyramid scheme. For example, the state of Pennsylvania has used the Unfair Trade Practices and Consumer Protection Act to sue pyramid schemes.
Similarly, the state of Texas has placed a pyramid scheme within the scope of the Texas Business and Commerce Code law, which punishes anybody engaged in advertising, selling, promoting, or conspiring in the plan with a minimum of 6 months to 2 years in prison and a fine of up to $10,000.
Legitimate investment plans concentrate around real products and services, while illicit investment models benefit from many layers of recruiting.
Why Is Pyramid Scheme Illegal?
A pyramid scheme may frequently perplex the average investor as to whether they are legal or not, given that they guarantee a more-than-acceptable return in a short period of time.
However, the Federal Trade Commission, FTC, classifies the pyramid scheme as illegal since they often obstruct the legitimate path of investing and fail to deliver on their promises. The companies that operate the pyramid scheme get individuals into the web by claiming to have a legitimate product to offer, but the whole system is based on commissions from new recruits.
The Lyoness Compensation Plan
In the "Friendship Bonus" scheme, the Lyoness MLM business model comes into action.
However, the Friendship Bonus scheme resembles affiliate marketing rather than traditional MLM compensation plans.
While most MLM companies pay their members when they acquire new members, Lyoness' Friendship Bonus does not pay you when you recruit someone.
However, recruiting is still required since you will earn a 0.5 percent commission on purchases made by individuals you recommended to Lyoness, as well as another 0.5% commission on sales made by people they brought in.
Let's be honest: this doesn't seem that terrible, does it?
These advantages are even more impressive when you realize that being a Lyoness member is completely free. If you are a premium member, you will have the opportunity to make extra money, shopping points, and cashback. However, in order to fully benefit from the Lyoness compensation plan, you will need to upgrade your membership status.
But don't get too enthusiastic until you hear why many people consider Lyoness a scam.
Conclusion
Shoppping points and earning cashback is appealing.
But, when it comes to building a business, you have plenty of options.
And even if you're dead set on becoming a network marketer, you've got way better options than Lyoness.
Keep in mind, I don't get paid to promote any of the programs I review. I personally think MLM is a great business model, but you could end up leaving way too much money on the table.
What Is Our Top Recommendation For Making Money Online In 2024?
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
Where Lyoness falls short is in scalability.
There’s only so much time in a day and there’s only so many people you can reach to sell by yourself.
MLM companies know this! Which is why they push so hard for you to recruit for your downline...you can’t get rich with it as a one man/woman show.
But what if you could make even more money off of little local websites without having to spend hundreds of dollars on overpriced products and a bunch of time recruiting people to sell under you?
With this Digital Leasing program, you can make recurring monthly income without constant sales to your friends and constant recruitment!
Sound too good to be true? Of course it does! But it isn’t…in fact, business owners wish they had this skill!
All you have to do is build and rank a LOCAL website and forward the jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business, tree service, plumbing, towing, etc.
How do you get paid and how much?
Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.
A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 10 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $500 a month!
See why they call it Digital Leasing now? That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to worry about:
- Your upline getting paid before you
- Begging your friends and family to buy from you
- Recruiting people all the time
Remember Lyoness? You only get what’s left of the pie if you meet a monthly quota...
The course we recommend actually allows you to collect HUGE FLAT RATE DEALS. Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group much better than the Lyoness MLM in our opinion. This group is much more active.
Unlike Lyoness, where you’re getting maybe $10 per sale, you could be getting 10-20X THAT.
A business will always want more leads and another job. In fact it doesn’t even matter that the job isn’t coming from their website name…they see it as it is…expanding Digital Leasing.
Unlike Lyoness, more people have been able to walk away from their 9-5 job as well.
Digital Leasing allows you to have total passive income with most of your day being spent WITH your friends, NOT selling to them.
Now, I know you probably have tons of questions…
#1 Business Recommendation
We each make around $10,000 per month with the help of this system.
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