Lyconet claims to be a purchasing network that calls itself a global community.
As a platform for network marketing activities, it offers members the advantages of a large network and the entry into a successful business model.
Are you a member of Lyconet and have been confronted with difficulties? Or would you like general information about the topics Shopping Community or Network Marketing? Then you can discuss this with a lawyer.
The law firm Herfurtner has offices in Munich and Hamburg. The firm’s lawyers advise clients from all European countries who have questions about the company Lyconet as well as Lyoness, Cashback Solutions or Cashback World. Here you can access our contact area.
What does Lyconet do?
Lyconet is one of many platforms for so-called network marketing. Other names for this business model are multi-level marketing or recommendation marketing.
The basic idea is to win customers in direct sales and sell them products or services. The acquired customers, in turn, have the opportunity to acquire additional customers and thus become part of the network.
Since advertising network partners profit from the sales of acquired customers and those of customers acquired by them, a pyramid system is created, metaphorically speaking. Each network member builds up its own structure, which is why it is also called structured sales.
The system Network Marketing is not free of criticism. So-called “snowball systems” are often suspected behind it. In these systems there is no (or only a highly overpriced) service at the centre, and the system is maintained exclusively by deposits of newly recruited members.
Multi-level marketing is generally permitted in Germany. However, it must not violate competition law. In the appendix to Section 3 (3) of the Act against Unfair Competition (“UWG”), point 14 states
“Prohibited commercial activities within the meaning of Section 3(3) are the introduction, operation or promotion of a system of sales promotion in which a financial contribution is demanded from the consumer for the possibility of obtaining remuneration (snowball or pyramid scheme) solely or mainly by introducing further participants in the system”.
The business magazine Wirtschaftswoche has a clear answer to the question “Lyconet what is it? In an article from June 18, 2019 it says:
“Lyconet is a distribution platform that allows one of the oldest rip-offs currently flourishing on the social networks: the pyramid scheme.”
Lyconet how does it work?
This article is entitled “Get rich while others shop” and describes the various sources of income or benefits that Lyconet promises in connection with the Cashback World product:
- For purchases you get money back if you use the “cashback card”.
- You can recruit new companies that accept the cashback card.
- You can recruit further sales partners for the cashback card.
In order to gain access to these advantages, however, an initial investment is necessary. For just under 300 €, one gets access to a software with which one can manage his network of customers, companies and sales partners. In addition, 2,000 € are to be paid for the so-called “starter package”.
How do I become an Employee?
On the homepage of the Lyconet Germany website, the tasks of a so-called “Lyconet Marketer”, i.e. a member of the distribution network, are described in more detail. Anyone who wants to earn money with Lyconet can do so in various ways:
Firstly, they have the opportunity to set up their own customer loyalty programme linked to the “Cashback World” system. The task is to introduce new members to this worldwide purchasing community and to communicate the advantages of purchasing from affiliated partner companies.
In addition, companies could be recruited to join the Cashback World customer loyalty program. The aim here is to convince retailers of all sizes to become part of the network. Retailers benefit from new customers and the opportunity to support existing customers within the program.
The third pillar is the recruitment of further Lyconet marketers. These would become members of the personal team and contribute with their work to the continuous expansion of the own network.
The Lyconet compensation plan, which is linked to the company’s website, contains detailed information about the conditions and possibilities of compensation during the course of a Lyconet career.
The advantages of being an “independent business partner” are summarised by Lyconet as follows:
- an entry that is free of risks,
- the ability to freely allocate his time,
- to be able to operate from anywhere,
- a good balance between work and family,
- performance-based remuneration,
- confident working and
- the possibility of financial independence.
Registration with Lyconet is free of charge and can be done directly via the corresponding section of the website. Here you first have to indicate whether you already have an account with Lyoness or Cashback World or whether you want to register completely new.
Lyconet Elite Seminar 2019
The so-called Lyconet Elite Seminar is an event where Lyconet marketers from all over the world meet. In 2019, the Veltins Arena in Gelsenkirchen was booked as the venue for the three-day event.
The aim is to present the latest news about the company and to bring guest speakers on stage to give advice on how to work more successfully as Lyconet marketers.
For the Lyconet Elite Seminar 2020, which will also take place in Gelsenkirchen, the website contains a pre-announcement with Arnold Schwarzenegger, who appears to be booked as a speaker for the upcoming event.
Who is Lyconet?
According to the imprint, Lyconet is operated as a public limited company, one of the legal forms provided for companies under company law. The registered office of “Lyconet International AG” is in Vienna, the company is registered at the Commercial Court of Vienna.
The Cashback World customer loyalty program, for which Lyconet marketers are to recruit members, is operated by mWGmyWorld Germany GmbH, which has its registered office in Cologne and is registered with the Cologne District Court.
In turn, mWGmyWorld Germany GmbH has commissioned a mWS myWorld Solutions AG as service company. According to a press report, this is the continuation of the Lyoness Group AG under a new name.
The company is headquartered in Vienna, and two of the members of the Supervisory Board are also represented on the Supervisory Board of Lyconet International AG. In addition, a member of the Management Board of mWS myWorld Solutions AG is also a member of the Supervisory Board of Lyconet International AG.
Lyoness Europe AG is another company that is significant in this context. According to information on the company’s website, Cashback World has entrusted it with the expansion of the network of companies owned by the myWorld Group.
Overall, Lyconet and Lyoness appear to be closely linked due to this network of companies.
Experience with Cashback
There are numerous articles on the Internet that deal with Lyconet, Lyoness, Cashback World or Cashback Solutions. If you want to know what others have experienced with Lyconet, you will find a whole range of sources and a wealth of information.
However, to get an idea of the business model as well as the earning opportunities, you should bear in mind that many of the contributions you will find in forums and blogs may not have been written in a neutral way.
This may be the case if the author or the publishing platform acts as an affiliate partner. The affiliate has a vested interest in making the company look good in order to earn commission payments through recommendations.
How serious is Lyconet?
Whether a provider such as Lyconet or other shopping clubs or networks behave seriously is difficult to judge from a distance. However, if one looks at the many press articles on the subject of Lyconet, a picture emerges that cannot be described as unreservedly positive.
For example, in an article published on September 2, 2018, the BILD newspaper judged that thousands of Germans had been lured into a trap on Instagram and Facebook. Social media posts had suggested that people could get rich in a short time.
Anyone who responded to the author of the post was invited to a business seminar. Visitors were encouraged to purchase one or more business packages from Lyconet for €2,500 each to support the development of the business in other countries in return for a share of the turnover.
In fact, however, there were never any relevant payments. In addition, the purchasers of the business packages – contrary to the original promise – did not see their money again after an agreed period of three years.
Criticism of Lyconet
Such reports are not isolated cases. In addition, there are various video contributions that are critical of Lyoness and its business model.
In particular, the brands of well-known companies were used for advertising purposes by identifying them as acceptance points for the cashback programme. According to Wirtschaftswoche, however, companies such as Douglas, Mediamarkt/Saturn or Fressnapf are in fact by no means partners of Lyconet, but would at best cooperate within the framework of an affiliate marketing agreement.
In other countries, legal action was taken against the parent company Lyoness. For example, the Norwegian Lottery Authority (Loteritilsynet) imposed a ban on myWorld Norway AS (formerly Lyoness Norway AS) and Lyoness Europe AG in May 2018.
All business activities in connection with Lyoness, Lyconet, Cashback World and myWorld should therefore be discontinued. An appeal by the company was dismissed on 12 February 2019.
At the beginning of 2019, Lyoness Italia S.r.l. was sentenced by the Italian competition authority AGCM to a payment of EUR 3.2 million for violating advertising law (misleading advertising) and operating a pyramid scheme.
Did you lose money?
Not every so-called Lyconet marketer can report that their expectations have been fulfilled. If commission claims exist for which payment is refused, one can contact a lawyer to discuss the matter.
Also those who have invested money in a business package at Lyconet 2016 or earlier without the promised repayment after three years can contact a lawyer’s office.
The lawyers of the Herfurtner law firm analyse each case with regard to possible claims. In addition to the effectiveness of revocation instructions, claims for damages are also examined in particular.
Customers of Lyconet and Lyconet Marketer can contact us with their concerns. Here you can go directly to our contact area.