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It all started a few weeks ago when an old friend of mine (who I had not talked to for at least five to seven years) texted me out of the blue wanting to catch up. When she meant catch up she wanted to talk on the phone, and there seemed to be a sense of urgency to it (she wanted to catch up in the next few days, not in the next week or two). I thought it was nice that she wanted to talk.
I updated her on my life and she updated me on hers. Then somehow the conversation switched to how she wanted to have an at-home business and how we can't rely on the government and if you want to retire early, you have to work at it (little did she know she was talking a retire-early crusader like me). Right when she said “and this segues into my next topic…” I went “a-ha…here we go, I knew it was too good to be true”
And So It Begins…
As I recovered from feeling annoyed that there was an ulterior motive to her wanting to “catch up”, she then talked about how she signed up for a new business and she wanted my opinion on whether I thought it was a good idea, and even if I wanted to join in on this new venture of hers. There were a few videos to watch together (and I could not watch by myself) she had to do it via a phone call. Being good natured (or perhaps a pushover) I went ahead and agreed to helping her out.
Customer Loyalty Program?
She was vague about the company until I directly questioned her, she just said it was a customer loyalty program that rewarded the customers for using their points card. It is a company that originated in Europe and is fast becoming very popular here in North America.
I then watch the first two videos (note, 30 minutes of my time) and she offered me to watch the remaining two videos (which would take at least 30-45 more minutes of my time) when I had enough and was done with entertaining my curiosity.
The second video spent about 20 minutes talking about how the economy is so bad, and how people aren't saving like they are used to for retirement, and how people have to take action. The whole time I was getting slightly more irate and ambivalent simultaneously, and asked myself what this has to do with a customer loyalty card program? Isn't this fear mongering?
That's when I called her out on it.
Isn't that a Pyramid Scheme?
Isn't Lyoness a pyramid scheme? No, it is not, that is illegal in Canada, she answered.
I'm not sure how much she paid to get set up as an ambassador, but I told her she seems to be wasting her time (I felt a little like Kevin O'Leary, blunt and honest). There is no “get rich quick” scheme, and people should invest their money regularly without trying to take advantage of contacts/ friendships built over the years.
She then concluded and asked me if I was interested in signing up for the free loyalty program. The loyalty program is a cash back membership points card, and if you shop at certain companies like Petro Canada, Superstore, etc. you get 1-2% back on top of your ‘usual' points Mastercard, and membership is free.
What is Lyoness, Anyway?
Lyoness is an online/ gift card/ loyalty points program that originated from Austria in 2003 (entering the Canadian market in 2010), and touts 4.5 million members worldwide, and 47,000 merchants. It reminded me a little of Great Canadian Rebates, with the added schmooze. There have been name changes, investigations, and class action lawsuits against Lyoness and many think it may be the beginning of the end of the company. Life Cents Magazine has a nice article explaining Lyoness' direct sales approach (better than what my friend could explain to me) which involves signing up friends/ acquaintances for the free points program (you get 0.5% commission of whatever they end up buying at the particular merchants, and if they refer friends you get commission on top of that too).
Perhaps I Was a Little Too Quick to Judge
Just like the Dragon Dens member (ahem, Kevin O' Leary) I might have been bit quick to judge Lyoness and label it a pyramid scheme. A few years ago, a truck driver pitched a business idea on Dragons Den and wanted them to sign up under him. You can fast forward to 25:00 to 32:00 to view it.
I just found it annoying that my friend really just wanted to call me up because she wanted something, not simply to catch up on old times.
Readers, have you ever been involved or contacted through Lyoness or another similar business? Is it a scam?
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