Lyoness released its 2012 Income Disclosure Statement, raising new questions about the company's business model and compensation plan. The document outlines affiliate earnings, and its data points to significant discrepancies in claims made by the company's members. The statement also presents access hurdles for those outside the United States.
The company's business model has faced scrutiny since a May 5, 2012 review detailed its operations. Over a thousand comments have since accumulated, with many affiliates defending Lyoness. These discussions often circle back to the role of the merchant shopping network versus the Account Unit (AU) investment scheme. Affiliates frequently claim the shopping network is the primary revenue source, or that it will eventually surpass AU investment earnings.
No substantial evidence has supported these claims beyond the mere assertion of customer existence. The argument that merchant shopping generates the bulk of Lyoness revenue often fails under examination. Affiliates then either cease participation in the discussion or admit issues with the AU investment scheme, choosing to focus instead on the shopping network's perceived benefits. This cycle repeats with new affiliates discovering the initial review. To date, no one has adequately explained how the affiliate-funded Account Unit investment scheme avoids being a Ponzi scheme with an attached shopping network.
Accessing the 2012 Income Disclosure Statement itself proved difficult for non-US IP addresses. Attempts to view the document resulted in a 403 HTTP "forbidden" error. The Lyoness IDS Policy document states copies "may be printed or downloaded without charge from the corporate website at www.lyoness.us/IDS." However, visiting this link from outside the US redirected users to the Lyoness US homepage. This control over who can view public financial statements seems a largely ineffective measure, given the document's availability via Google cache.
The IDS reveals that 86.16% of all Lyoness affiliates are not classified as "affiliates" in the conventional sense. These individuals generated an average annual cashback of just $12.95. This figure is an average calculated by Lyoness and excludes 46% of all "members," which includes both affiliates and customers, who received no cashback at all. The remaining 54% of shoppers averaged the $12.95 annual return.