There are two ways to analyse Lyoness.

You can either look at the giftcard and cashback of the business, totally ignore the Accounting Unit investment scheme and thus conclude Lyoness is about shopping…

Or you can follow the flow of money through the company, and realize that most of the commissions paid out are a result of deposits being made directly with Lyoness on the expectation of an eventual >100% ROI.

Guess which approach Lithuania adopted?

With an estimated 300,000 affiliates in the country, Lithuanian regulators

were suspicious that the Lyoness Loyalty can be a pyramid scheme because (when) someone else (is) recommended to join the community shopping, (the) Lyoness member receives a bonus of 0.5% of the purchase price of (the) new member (they recruited).

However, having considered the request of the Bank of Lithuania UAB Lithuania Lyoness’ activities, the State Consumer Rights Protection Authority did not see (Lyoness as a) pyramid.

“Users are able to receive first consideration for the purchase and use of the product, and not for the inclusion of other users to the Lyoness shopping international community” – holds service .

They said that neither the nor the other benefits for more people to join the loyalty scheme, Lyoness members do not.

Those last two paragraphs are key.

Firstly yes, it’s entirely possible to purchase products from third-party merchants who join the Lyoness network (often just to harass and pressure their own customers into joining the scheme). That however in no way negates or justifies the direct investment into account units that Lyoness offers affiliates.

And secondly, no benefit when affiliates join the scheme?

Quite obviously the State Consumer Rights Protection Authority did not bother to go over Lyoness’ compensation plan and make inquiries regarding the scheme’s Account Unit investment scheme.

Had they of done so, they’d have soon realized the money held in Lyoness’ Bank of Lithuania account has nothing to do with shopping.

I mean just stop and think about that for a second. Lyoness’ facade is that it’s about shopping and costs nothing to join. So why is affiliate money being deposited into Lyoness’ bank account?

And under the guise of running a cashback scheme, the AU investment money that flows into Lyoness’ Bank of Lithuania account is then used to pay out ROIs… when enough new money has flowed into the account (AU maturity).

If you sign up a Premium Lyoness affiliate, they have to make an upfront investment of around $3000. And if any of those funds triggers AU maturity for the recruiting affiliate, they receive a >100% ROI. Otherwise they find themselves one new investment closer to AU maturity.

Either way, there’s a direct benefit paid out to the recruiting affiliate (either in full (ROI) or partial (1 investment closer to reaching ROI), when a new Lyoness affiliate is recruited and invests in AUs (either as a Premier affiliate or otherwise).

“Shopping”, 
riiiiiiiiiiight. 
Money

🤖 Quick Answer

Did Lithuanian regulators properly investigate Lyoness's business model?

Lithuanian authorities focused on the shopping and cashback components while largely disregarding the Accounting Unit investment scheme. By ignoring the flow of money showing that commissions derived primarily from member deposits with expected returns exceeding 100%, regulators failed to examine the mechanism potentially constituting a pyramid scheme structure.

What recruitment incentive structure concerned Lithuanian authorities?

Lithuanian regulators identified that existing Lyoness members received a 0.5% bonus from the purchase price when recruiting new members into the community shopping program. This commission structure based on recruitment raised suspicions about pyramid scheme characteristics within the loyalty system.

How many Lyoness affiliates were operating in Lithuania?

Approximately 300,000 affiliates were estimated to be active in Lithuania, representing substantial market penetration and justifying regulatory scrutiny of the company's operational mechanisms and compensation structures.

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