The Honey browser extension, widely promoted for its ability to find and apply online discount codes, is under scrutiny following allegations of deceptive practices potentially harming both consumers and content creators.
Founded in 2012 by Ryan Hudson and George Ruan, Honey quickly gained traction by offering automatic coupon applications during online shopping. By 2014, it had attracted nearly one million users, and its popularity soared, leading to its acquisition by PayPal for approximately $4 billion in 2020.
Recently, YouTuber MegaLag released a damning investigative video titled "Exposing the Honey Influencer Scam," wherein he accuses Honey of selectively displaying discount codes favoring its business partners over more advantageous deals available to consumers. According to MegaLag, Honey has been known to present minor discounts, such as 5% off, even when substantial savings of 30% are accessible through other means. He stated bluntly, "This could be one of the most aggressive, shameless marketing scams of the century," raising alarms about the ethical implications of such practices.
The video, part of a three-part series, has since garnered over 9.4 million views, sparking significant backlash from the online community. Users and influencers have begun voicing their concerns via social media, with many advocating for the uninstallation of the extension, highlighting apprehensions about the ethics of Honey's business model.
Further complicity is alleged against Honey, as it is accused of reattributing sales made through affiliate links, ensuring they receive credit for the sale rather than the original influencers. This practice diminishes the income potential for influencers who rely on affiliate marketing, crippling their revenue streams. Influencers have expressed frustration over this blatantly unfair approach as many depend on these commissions to supplement their income.
Despite the growing concerns raised by users and influencers, Honey has yet to issue any official response to the allegations. The silence from both Honey and its parent company, PayPal, has left many wondering about the trustworthiness of the extension.
PayPal responded indirectly to these claims by defending Honey’s business model and asserting it follows industry standards, including "last-click attribution," which is common among affiliate marketing programs. They emphasized, "Our coupons are sourced from merchant partnerships, deal networks, and user submissions," which attempts to clarify how discount offerings are selected and presented.
Amy Bonitatibus, PayPal’s Chief Corporate Affairs and Communications Officer, indicated Honey helps shoppers save money and merchants increase sales by reducing cart abandonment. She articulated this position amid the turbulence created by MegaLag's allegations, highlighting the company's commitment to transparency.
MegaLag also critiqued Honey’s cashback rewards program, branding it as nothing more than "a lame cashback scheme." He compared his earnings when using his affiliate link versus PayPal Rewards, sharing stark contrasts. For example, using his affiliate link for purchasing a NordVPN subscription worth $95 earned him around $35, whereas using PayPal Rewards culminated only in 89 cents cashback. This underscored the disparity between the experiences of influencers and ordinary users who leverage Honey.
The allegations have reignited discussions about the ethical responsibilities of online platforms, particularly ones heavily integrated with influencer marketing. Many consumers are left questioning whether the savings they believe they are receiving through Honey are, in fact, as substantial as advertised, or if they are hindering their overall shopping experience.
Adding to this scrutiny, past investigations have also targeted Honey's advertising practices. The National Advertising Division (NAD) previously launched inquiries about misleading advertisements asserting Honey could locate "every working code on the internet." While Honey claimed to have discontinued these ads for "business reasons," the incident raises longstanding concerns about transparency.
Despite the ruckus surrounding the recent allegations, PayPal maintains Honey's integrity and emphasizes its capacity to serve both consumers and merchants. But as the story continues to develop, the repercussions for Honey’s reputation and its operational modalities seem uncertain.
With this backdrop, users are encouraged to exercise caution when utilizing Honey for online shopping. The scrutiny could prompt consumers to seek alternative methods for finding discounts, such as manually searching for coupon codes or utilizing other reputable cost comparison tools. While the full extent of the allegations' impact remains to be seen, it is clear Honey must work diligently to regain the trust of its users if the claims prove valid.
