Quick affirmation of some others' thoughts: I don't like the way this referral program works. Putting pressure or even perceived pressure on my friends to buy for my benefit feels bad.

I would prefer somethings that gives us a mutual benefit (or even just a benefit for me) that is not dependent on their spending. A shared benefit could be something like matching cosmetic cloaks, a pack of 15 enhanced experience items (like the ones from the store), some destiny points for both of us, or even a predefined set of gear that is mailed in game to each of the two based on the first class that they create after referal. for each, a chest, hands, feet, legs, one ring, one bracelet and a pocket item that each have 3-5 points in good stats for that class or morale/power just to get the new characters a jump and reward their playing together. I think giving away these things to the new player should give them something to be excited about and will probably generate more good will between the recruiter, the recruited and the game than giving the player who has been at it longer even more rewards for getting a buddy to spends some money.

If Turbine would prefer to reward only the veteran player, they could give him or her a mount, housing items, emotes, maybe a choice of cosmetic gear or even access to one LI (not level cap first age, but maybe a second age or a pair of appropriate weapon/class item third ages). This should be upfront, and one time only for each recruit, and any benefit that received from my recruiting friends joining shouldn't give any indications of their spending, and should be cosmetic or minimal in terms of game enhancing.

Heck, I am certain that Turbine could even let the players choose their own rewards by having a special section of the store dedicated to the referrals. That way, with say a small referral stipend, both players can get stuff that is important to them, but have no feelings of obligation or financial awkwardness around each other.

Hope the thoughts are helpful.