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Preferred Member Program – Frequently Asked Questions

Below are general answers to frequent questions regarding the Preferred Member program, but certain answers may vary by local rules and regulations. For specific questions, please contact your local Member Services Team.

What is a Preferred Member?

A Preferred Member is a person who only wishes to purchase product for their and their household’s personal consumption at a discounted price. Preferred Members may not retail the product and cannot recruit others. In certain countries, where permitted by law, Preferred Members may be able to refer other Preferred Members and use the referred Member’s points to help obtain higher discounts.

Why can’t a Preferred Member sell products or build a business?

One of the benefits of the Preferred Member program is the simple sign-up process for ”Members” who just desire to consume the product at a discount. This simpler sign-up process does not include the rules that govern and protect the business of all Distributors. In many markets there are also tax benefits available to Preferred Members that would not be available if they were allowed to sell products to others. If a person wants to sell the products, they can convert to become a Distributor by purchasing the Distributor kit, which includes a more complex agreement covering the rules and guidelines required for those who wish to sell products and build a business.

How do Preferred Members sign up?

A person can become a Preferred Member only if sponsored by a Distributor. While the Company runs Preferred Member promotions from time to time to assist Distributors in attracting and retaining their Preferred Members, the Company does not seek out Preferred Members and they must be sponsored by a Distributor. A Preferred Member signs up via MyHerbalife.com or via a paper application.

Do Distributors have to sign up Preferred Members?

No. A Distributor is not required to use the Preferred Member Program. The choice of whether to sign up a member as a Preferred Member is entirely up to the Distributor.

Do Distributors have to offer the wholesale discounts under the Preferred Member Program?

No. While the Preferred Member Program offer wholesale discounts to Preferred Member, Distributors can elect not to register their members as Preferred Members, in which case, Distributors can remain free to charge any price they wish to their members. Put simply, the structured discounts entailed in the Preferred Member Program are just one of many options a Distributor can elect to set prices.

Can a Preferred Member change their sponsor?

Although this is not encouraged, a Preferred Member could wait their Period of Inactivity (POI) and sign up as a new Preferred Member under a new Sponsor, which will require the purchase of a new Preferred Member Pack.

Can a Preferred Member convert to a Distributor?

Yes, a Preferred Member can convert to a Distributor by purchasing a Conversion pack.

Can a Distributor convert to a Preferred Member?

Yes, a Distributor can convert to become a Preferred Member. Please note, however, that once a
Distributor converts to Preferred Member, they will permanently lose their downline, which will be moved to their sponsor, and will not regain them if they choose to convert back to a Distributor.

Whose Member is a Preferred Member, the Distributor who signed him/her up or the Company?

A Preferred Member is the Distributor’s Member. In the same way that a Distributor who is sponsored by another Distributor and who has signed a Distributor Agreement with the Company remains that person’s Distributor, a Preferred Member who is sponsored by a Distributor is that Distributor’s Preferred Member and falls under their dowline lineage. From time to time, the Company may run Preferred Member promotions (such as Winback campaigns) to assist Distributors in attracting and retaining their Preferred Members. If a Preferred Member comes back, they are automatically reassigned to the original Sponsor, or the next upline if the original Sponsor is no longer available.

Does the Preferred Member Program hurt the Distributor/Member relationship?

No. Distributors who choose to use the Preferred Member Program can and should continue to provide the unique, personally tailored customer support and follow-up that they do with their other customers. There is nothing about the Program that would prevent Distributors from providing the “Distributor Difference” service or establishing the personal relationship with their Preferred Customers.

Does the Preferred Member go to the upline if the sponsoring Distributor leaves?

Yes. When a sponsoring Distributor leaves the business, all that Distributor’s downline lineage, including any Preferred Members and any referrals who signed up as Preferred Members (where available), move up, just as they would if the Preferred Member had been a Distributor.

What happens to Preferred Members and their information if they are non-active and deleted from the program?

The same as when a Distributor becomes inactive, the company maintains the lineage relationships for inactive Preferred Members. When a Preferred Member chooses to reactivate their membership, including as a result of periodic WinBack campaigns conducted by the company, they are reactivated under their original sponsor or the next active upline if the original sponsor is no longer active. If the returning Preferred Member has waited out their Period of Inactivity they may choose to sign a new agreement under a different sponsor.

Is Preferred Member information protected by privacy laws?

Yes, Preferred Member information is protected by privacy laws and governed by Herbalife Nutrition’s Privacy Policy, which can be found on MyHerbalife.com.

Does the Preferred Member Program change a Distributor’s ability to earn wholesale profit, royalties or production bonus under our Sales and Marketing Plan?

No. Each Preferred Member must have a sponsoring Distributor. As such, there is always a Distributor who receives credit for every order placed by a Preferred Member. In other words, Preferred Member purchases generate wholesale commissions, royalties and production bonuses, all of which are paid out to upline Distributors just as if those purchases were made by downline Distributors. The Preferred Member Program has not changed the Sales and Marketing Plan.

Does the Preferred Member Program violate the Tirelli agreement?

No. The Preferred Member Program is fully consistent with the Tirelli agreement. In general, the Tirelli Agreement applies to material and permanent changes to the structure of our direct sales business model and our Sales and Marketing Plan (e.g. decreasing the discount percentages for distributor product purchases or decreasing royalty override percentages and other bonuses or making qualifications more difficult to achieve). The Preferred Member Program does not change the direct sales business structure or Sales and Marketing Plan because every Preferred Member has a sponsoring Distributor and upline Distrbutors receive wholesale commissions, royalties and production bonuses, in accordance with our Sales and Marketing Plan.

Can a Preferred Member purchase products in other countries, for example while traveling?

At this time, a Preferred Member cannot place an order directly with the company in another country. We will update you if that changes in the future.

Can a Spouse or child in a household also become a Preferred Member?

A spouse of a Distributor or Preferred Member is not permitted to also become a Preferred
Member. This is because a Preferred Member is eligible to convert to become a Distributor, and our Distributor Rules do not allow a spouse to have a separate Distributorship. Subject to local limitations, a child in the same household may become a Preferred Member or a Distributor once they meet the minimum age requirements applicable in that country (1)

(1) In the USA, a dependent child in the same household is not allowed to be a Preferred Member if either of their parents is already a Distributor.

Source: Preferred Member Program – Frequently Asked Questions (April, 2022)

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