MegaLag, a New Zealand YouTuber who creates investigative and technology-focused content, published a new video entitled Exposing the Honey Influencer Scam, investigating the money-saving browser extension Honey, which was acquired by PayPal for $4B in January 2020.
Honey works by automatically searching for and applying coupon codes at checkout, helping users save money without having to scour the web themselves for promo codes. However MegaLag reveals a dark side to the extension for influencers and bloggers, who earn money from their affiliate links.
Here's a summary of MegaLag's video investigation:
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Honey replaces original affiliate tracking cookies with its own by exploiting “last-click attribution” to override existing cookies, redirecting commissions from content creators to itself without their consent.
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The extension selectively displays lower-value discount codes, withholding better deals from users to favor its merchant business partners.
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Despite promises of finding the best online deals, Honey actually collaborates with merchants to control which discounts are shown, limiting consumer savings. This practice is part of its pitch to merchants.
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Many influencers who promote Honey are unaware that the extension is diverting their affiliate commissions, undermining their revenue streams. Effectively the influencers have been earning pennies in sponsorships from Honey, while giving up dollars in potential commissions from their audiences.
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MegaLag discovered that Honey's deceptive practices have cost content creators millions of dollars, and that their cashback rewards program is equally garbage for consumers.
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Honey has historically offered Honey Gold (now called PayPal Rewards) to incentivize users to complete purchases by sharing their commission, but the company keeps an overwhelming majority share of the commission. MegaLag gave an example of NordVPN paying Honey a $35 payout, while the user earned only 89 cents of it as a reward.
Normally the type of “affiliate link hijacking” that Honey employs goes against a website's affiliate TOS. If any normal affiliate was doing this, they'd likely get terminated from the affiliate program if the practice was discovered. However Honey gets away with it by claiming to actually save the merchant's money by giving them the ability to control which discounts appear.
I highly recommend watching the full video if you work in the affiliate space or run an affiliate program for your own business.
PayPal, any response?