Lyoness International AG is a

Swiss Swiss most commonly refers to: * the adjectival form of Switzerland * Swiss people Swiss may also refer to: Places * Swiss, Missouri * Swiss, North Carolina * Swiss, West Virginia * Swiss, Wisconsin Other uses * Swiss Café, an old café located ...

-based company that operates a shopping reward and loyalty program. Its core service connects consumers, retailers, and service providers by offering incentives and benefits through a structured cashback system.Lyoness: Das Geschäft mit dem Einkaufen
– ''Beobachter'' (in German), March 2010. The company was originally established in 2003 in Switzerland as a

multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial and sometimes illegal marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salarie ...

(MLM) organization. It developed a hybrid model combining loyalty rewards with member referrals and commission-based participation.Warum der VKI vor Lyoness warnt
– ''Kleine Zeitung'' (in German), February 2012.

History

Lyoness was founded in 2003 in Switzerland as a shopping community that offered a loyalty rewards system combining cashback incentives with member-based participation. Over time, the company introduced additional operational entities, brands and platforms aimed at streamlining services and expanding internationally. In 2023, Lyoness International AG and Lyoness Europe AG, which served as umbrella companies for the Lyoness business model, filed for insolvency. This development marked a significant shift in the organization’s structure, although the Lyoness name continues to be used in legal, financial, and structural contexts in several markets.

Business Model

Lyoness was founded in Switzerland in 2003 as a shopping community that offered a loyalty program combining cashback rewards with member-based participation.Lyoness: Das Geschäft mit dem Einkaufen
– ''Beobachter'' (in German), March 2010. Members could receive benefits from purchases made at participating partner merchants. The model also included referral-based incentives, where members could introduce others to the platform and potentially earn commissions tied to their network's activity. The company later expanded its services to include various marketing tools for partner businesses, aiming to increase consumer engagement and retention. This included features such as loyalty cards, promotional campaigns, and access to a global shopping community. Businesses participating in the program were typically charged fees based on the performance or volume of transactions generated through the platform.Lyoness-unter-Beschuss
– ''Wiener Zeitung'' (in German), March 2013.

Previous corporate structure

In 2004, the

CEO A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

of Lyoness, Hubert Freidl, was hired as the company's

director Director may refer to: Literature * ''Director'' (magazine), a British magazine * ''The Director'' (novel), a 1971 novel by Henry Denker * ''The Director'' (play), a 2000 play by Nancy Hasty Music * Director (band), an Irish rock band * ''D ...

.Excerpt from the St. Gallen (Switzerland) Chamber of Commerce, April 30, 2013 Lyoness comprises at least seven corporations registered in

Switzerland Switzerland, officially the Swiss Confederation, is a landlocked country located in west-central Europe. It is bordered by Italy to the south, France to the west, Germany to the north, and Austria and Liechtenstein to the east. Switzerland ...

, nine corporations registered in Austria and approximately 42 additional national and regional corporations all around the globe.“Lyoness Corporate Structure – Organigramm”
“Lyoness Official Corporate Website”, June 7, 2013 The name "Lyoness" was derived from the

Celtic Celtic, Celtics or Keltic may refer to: Language and ethnicity *pertaining to Celts, a collection of Indo-European peoples in Europe and Anatolia **Celts (modern) *Celtic languages **Proto-Celtic language *Celtic music *Celtic nations Sports Foot ...

mythological kingdom "

Lyonesse Lyonesse ( /liːɒˈnɛs/ ''lee-uh-NESS'') is a kingdom which, according to legend, consisted of a long strand of land stretching from Land's End at the southwestern tip of Cornwall, England, to what is now the Isles of Scilly in the Celtic ...

Continental and country organisation

The continental organisations are

subsidiaries A subsidiary, subsidiary company, or daughter company is a company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidiary company. Unl ...

of ''Lyoness International AG'' and are registered as

stock corporation A joint-stock company (JSC) is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Shareholder ...

s. These are: ''Lyoness Europe AG'' (founded in 2003), "Lyoness IMEA S.A." (2009), ''Lyoness North America Ltd.'', "Lyoness South America S.A.", "Lyoness Asia Ltd." (2011). The country offices are

of the continental

s and are registered as privately owned, limited-liability companies.

Social involvement

According to Lyoness, every purchase made by its members at its partner companies benefits the Child and Family Foundation (a

charity Charity may refer to: Common meanings * Charitable organization or charity, a non-profit organization whose primary objectives are philanthropy and social well-being of persons * Charity (practice), the practice of being benevolent, giving and sha ...

organisation) and the Greenfinity Foundation (an

organisation An organization or organisation ( Commonwealth English; see spelling differences) is an entity—such as a company, or corporation or an institution ( formal organization), or an association—comprising one or more people and having a pa ...

promoting

sustainability Sustainability is a social goal for people to co-exist on Earth over a long period of time. Definitions of this term are disputed and have varied with literature, context, and time. Sustainability usually has three dimensions (or pillars): env ...

). In 2012, Lyoness announced that it and its affiliated Greenfinity foundation would be the title sponsors of the Austrian Open golf tournament for three seasons, through to 2014. Lyoness also sponsored the ‘European Juniors League’, a European

football Football is a family of team sports that involve, to varying degrees, kick (football), kicking a football (ball), ball to score a goal (sports), goal. Unqualified, football (word), the word ''football'' generally means the form of football t ...

competition for youth teams, as well as Austrian club

SK Rapid Wien Sportklub Rapid (), commonly known as Rapid Wien or Rapid Vienna in English language, English, is an Football in Austria, Austrian professional football club playing in the country's capital city of Vienna. Rapid has won the most Austrian cham ...

. Lyoness announced that it would pay 9 million euros over 5 soccer seasons but would not be the main sponsor of Rapid Wien.

Legality and alleged deceptive practices

In March 2010, the Swiss magazine ''Beobachter'' published an article with a review and analyses of Lyoness. In early 2012, ''

Kleine Zeitung ''Kleine Zeitung'' (; ) is an Austrian newspaper based in Graz and Klagenfurt. As the largest regional newspaper in Austria, covering the federal states Styria and Carinthia with East Tyrol, the paper has around 800,000 readers. History and pro ...

'' published an article suggesting that Lyoness operated an irrelevant shopping community. ''

L'Hebdo ''L'Hebdo'' (, ) was a weekly French language news magazine published in Lausanne, Switzerland. Founded in 1981, it focused on social, economic and cultural issues. It was published by Ringier. Following its unprofitability, it ceased publicati ...

'', a Swiss magazine also criticed the company and its investment methods, not enough clear for general public. In February 2012, an article by Beobachter revealed that internal Lyoness communications offered members "bounties" of up to 45,000 CHF for providing "relevant information" about critics of the company. Furthermore, the article highlighted concerns about the Lyoness business model, suggesting it prioritizes recruitment over providing discounts.“Lyoness: Drohen mit Millionenforderung”
“Beobachter”, February, 2012 In 2012, the Austrian ''

Der Standard ''Der Standard'' () is an Austrian daily newspaper published in Vienna. It is considered a newspaper of record for Austria. History and profile ''Der Standard'' was founded by Oscar Bronner as a financial newspaper and published its first editio ...

“Causa Lyoness – VKI leitet Verbandsklage ein”
“Der Standard”, April 23, 2013,'' and the Swiss ''

Handelszeitung The ''Handelszeitung'' is a German-language Swiss weekly newspaper. The paper was established in 1861 being the oldest business newspaper in Switzerland. It is controlled by Axel Springer Schweiz AG. The paper is published on Wednesdays and has ...

'' reviewed the Lyoness and mentioned it has failed in financial fullfillment according to EU and Swiss investments regulations.“Urteil gegen umstrittene Schweizer firma Lyoness”
“Handelszeitung”, June, 2012“Lyoness: Prominente Partner Springen Ab”
, “Handelszeitung”, September 2012
“Wiener Zeitung”, March 2013 The ''

Wiener Zeitung ''Wiener Zeitung'' () is an Austrian newspaper. First published as the ''Wiennerisches Diarium'' in 1703, it is one of the oldest newspapers in the world. Until April 2023, it was the official gazette of the government of the Republic of Austria ...

'' reported in 2013 about Lyoness regarding financial tensions between the brand and the Austrian government, having provided a detailed analyses on Lyoness management and functioning. In 2023 Lyoness International AG and Lyoness Europe AG filed for insolvency, although their national subsidiaries remained operational.

Television

On November 30, 2011, ''Dragons’ Den Canada'' aired an episode featuring the pitch of the Lyoness ‘Premium Member’ Andy Nyakas from

Brampton, Ontario Brampton is a city in the Canadian Provinces and territories of Canada, province of Ontario, and the regional seat of the Regional Municipality of Peel. It is part of the Greater Toronto Area (GTA) and is a List of municipalities in Ontario#L ...

, asking the ‘Dragons’ to jointly invest CDN$175,000 to acquire Lyoness ‘business packages’ through him.Dragons’ Den Canada season 6: episode 9, November 30, 2011 None of the Dragons were willing to invest. Instead, they ridiculed him and his business idea, suggesting that it's 'distasteful', and 'a pyramid scheme’.

Robert Herjavec Robert Herjavec (; born September 14, 1962) is a Croatian-Canadian businessman, investor, and television personality. Herjavec founded BRAK Systems, a Canadian integrator of Internet security software, and sold it to AT&T Canada (now Allstream ...

also advised Nyakis, who borrowed against his house to acquire Lyoness positions, not to invest any more money in the Lyoness system. Another

television show A television show, TV program (), or simply a TV show, is the general reference to any content produced for viewing on a television set that is broadcast via over-the-air, satellite, and cable, or distributed digitally on streaming platf ...

that has reported on Lyoness is the Austrian

public television Public broadcasting (or public service broadcasting) is radio, television, and other electronic media outlets whose primary mission is public service with a commitment to avoiding political and commercial influence. Public broadcasters receive f ...

program '' ORF Report''. This programme aired episodes under the names ‘Lyoness - The money machine’ (November 13, 2012), 'Shopping Community Lyoness' (November27th, 2013) and ‘The man behind Lyoness’ (April 24, 2013), interviewing

expert An expert is somebody who has a broad and deep understanding and competence in terms of knowledge, skill and experience through practice and education in a particular field or area of study. Informally, an expert is someone widely recognized ...

s and former participants, which both say that Lyoness operates a

pyramid scheme A pyramid scheme is a business model which, rather than earning money (or providing Return on investment, returns on investments) by sale of legitimate product (business), products to an end consumer, mainly earns money by recruiting new members ...

behind the

façade A façade or facade (; ) is generally the front part or exterior of a building. It is a loanword from the French language, French (), which means "frontage" or "face". In architecture, the façade of a building is often the most important asp ...

of a ‘ shopping community’.“Der Mann hinter Lyoness”
“ORF Report”, April 23, 2013 The latter

episode An episode is a narrative unit within a larger dramatic work or documentary production, such as a serial (radio and television), series intended for radio, television or Streaming media, streaming consumption. Etymology The noun ''episode'' is ...

also features

hidden camera A hidden camera or spy camera is a camera used to photograph or record subjects, often people, without their knowledge. The camera may be considered "hidden" because it is not visible to the subject being filmed, or is disguised as another obje ...

footage In filmmaking and video production, footage is raw, unedited material as originally filmed by a movie camera or recorded by a digital video camera, which typically must be film editing, edited to create a motion picture, digital video, video cli ...

of Hubert Freidl telling his followers that spreading ‘Cashback Cards’ is irrelevant – ‘it is all about the positions, positions, positions, positions’.

Income

From a Lyoness income disclosure statement“Lyoness Income Disclosure Statement 2012”
“Lyoness Official Website”, June 8, 2013 can be derived that the

average In colloquial, ordinary language, an average is a single number or value that best represents a set of data. The type of average taken as most typically representative of a list of numbers is the arithmetic mean the sum of the numbers divided by ...

Lyoness member in the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

receives a gross annual commission of approximately $275, or $23 per month. The monthly

median The median of a set of numbers is the value separating the higher half from the lower half of a Sample (statistics), data sample, a statistical population, population, or a probability distribution. For a data set, it may be thought of as the “ ...

commission In-Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of anot ...

value of $0.38 indicates that the vast majority of the members receives a lower commission than the 23 dollar

month A month is a unit of time, used with calendars, that is approximately as long as a natural phase cycle of the Moon; the words ''month'' and ''Moon'' are cognates. The traditional concept of months arose with the cycle of Moon phases; such lunar mo ...

. Additionally, the

document A document is a writing, written, drawing, drawn, presented, or memorialized representation of thought, often the manifestation of nonfiction, non-fictional, as well as fictional, content. The word originates from the Latin ', which denotes ...

states that 46% of the Lyoness members makes $0 in

and that the

annual expenditures, not taken into account when

calculating A calculation is a deliberate mathematical process that transforms a plurality of inputs into a singular or plurality of outputs, known also as a result or results. The term is used in a variety of senses, from the very definite arithmetical ...

the

, are $1,294. Similar figures have been reported in 2013, and in Canada.

Internet

On the Internet, various websites and blogs from all over the

world The world is the totality of entities, the whole of reality, or everything that Existence, exists. The nature of the world has been conceptualized differently in different fields. Some conceptions see the world as unique, while others talk ...

have focused critical attention on Lyoness, accusing the company of illegal business practices (mainly of running pyramid and Ponzi schemes) and questioning the alleged

partnership A partnership is an agreement where parties agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations ...

s between Lyoness and several

multinational corporation A multinational corporation (MNC; also called a multinational enterprise (MNE), transnational enterprise (TNE), transnational corporation (TNC), international corporation, or stateless corporation, is a corporate organization that owns and cont ...

s, as well as the validity and relevance of the certificates granted to the Lyoness shopping community. In April 2013, it was reported that former (Austrian) participants of Lyoness had organised themselves and founded an organisation and website called ''Plattform Lyoness''. Not much later, an international equivalent was established under the name ''Lyoness Complaint Centre''. In the beginning of June 2013, it was reported that Lyoness filed legal complaints against the founders of ''Plattform Lyoness''."Ermittlungsakt für Lyoness-Gegner tabu"
"Der Standard", June 5, 2013 The founders were forced to remove

legal documents Legal instrument is a legal term of art that is used for any formally executed written document that can be formally attributed to its author, records and formally expresses a legally enforceable act, process, or contractual duty, obligation, or ...

concerning Lyoness from their

website A website (also written as a web site) is any web page whose content is identified by a common domain name and is published on at least one web server. Websites are typically dedicated to a particular topic or purpose, such as news, educatio ...

. ''Plattform Lyoness'' has reported that a

preliminary injunction An injunction is an equitable remedy in the form of a special court order compelling a party to do or refrain from doing certain acts. It was developed by the English courts of equity but its origins go back to Roman law and the equitable reme ...

in a subsequent

court case Legal proceeding is an activity that seeks to invoke the power of a tribunal in order to enforce a law. Although the term may be defined more broadly or more narrowly as circumstances require, it has been noted that " e term ''legal proceedings'' ...

forced ''Plattform Lyoness'' to change its

domain name In the Internet, a domain name is a string that identifies a realm of administrative autonomy, authority, or control. Domain names are often used to identify services provided through the Internet, such as websites, email services, and more. ...

from www.plattform-lyoness.at to www.lyoness-geschaedigte-plattform.at, as the court found that

s linking to negative content about Lyoness should carry a distinctive term to indicate that the

domain A domain is a geographic area controlled by a single person or organization. Domain may also refer to: Law and human geography * Demesne, in English common law and other Medieval European contexts, lands directly managed by their holder rather ...

is not hosted by Lyoness itself. ''Plattform Lyoness'' solved this by adding the term 'geschaedigte', which is the German word for 'victims'. Lyoness' other demands were not granted by the court. In August 2015, two former employees were acquitted in Austria on charges of fraud and money laundering."ORF"
/ref>

References

External links

* {{Authority control Austrian brands Online retailers of Austria Customer loyalty programs Multi-level marketing companies Multinational companies Pyramid and Ponzi schemes Economy of Graz