A recent investigation by MegaLag has uncovered potentially fraudulent practices by Honey, the popular browser extension that promises discount codes to online shoppers. Despite its free nature, research suggests that honey could mislead consumers and unfairly favor companies.

A recent investigation by MegaLag has shed light on potentially deceptive practices by Honey, the popular web browser extension that promises consumers discount codes for online purchases. Despite its free and widely promoted nature, research suggests that honey may be costing consumers money and giving companies an unfair advantage.

An important tool for stimulating purchases

Honey, which launched in 2012, quickly gained popularity after it was leaked on Reddit and went viral. By 2014, the extension already had over 900,000 users. This growth coincided with the rise of online shopping, where discount codes became an important tool to incentivize purchases. Companies started using discount codes to offer generic or personalized discounts to attract more customers.

Honey’s promise was simple and enticing: Install the extension and it will automatically apply the best discount codes available, even if you missed them while shopping. Many users, including the author, have experienced the frustration of missing out on discounts, making Honey’s offer extremely tempting.

As the platform grew, Honey raised millions of dollars in funding. In 2020, PayPal recognized its potential and acquired Honey for $4 billion and renamed it PayPal Honey.

How honey could cost you money

While Honey’s advertising to consumers seemed straightforward, MegaLag’s investigation shows that the extension may have resulted in misleading users, often benefiting companies and Honey itself. The idea was that Honey would automatically apply the best discount codes available, ensuring users always got the best deal. However, what MegaLag has uncovered is anything but reassuring.

According to MegaLag, discount codes often cause complications for companies. “Every time a discount code is created, the same conversation happens: ‘What happens if this gets leaked on Reddit?'” When discount codes get leaked, Honey’s initial job was to track them down and apply them to users, even if they do was not intended by the company.

But over time, Honey began working with companies to offer specific discounts, such as the “HONEY10” code for 10% off. The investigation highlights instances where Honey promoted these codes and ignored those that offered greater savings. As a result, the very tool designed to save consumers money may have encouraged them to settle for smaller discounts.

In these cases, Honey’s extension inadvertently misled consumers into believing they were getting the best deal possible, when in reality they were missing out on greater savings.

Impact of honey on influencers

MegaLag’s investigation also looks at Honey’s impact on influencers, particularly those who promoted the extension, such as Linus Tech Tips and Marques Brownlee. The investigation uncovers a troubling aspect of Honey’s behavior: it steals credit for sales that influencers generate through affiliate marketing.

Affiliate marketing is widespread in the online world. Influencers or platforms like Goosed can recommend products and include affiliate links. When users purchase through these links, the influencer or platform receives a small commission without affecting the price to the consumer. However, if a user has Honey installed and clicks on an affiliate link, MegaLag says Honey’s algorithm takes credit for the sale and redirects the revenue away from the influencer or platform.

While the impact on the revenue channels of influencers like Goosed may not be felt directly, the bigger problem lies in Honey’s deceptive practices that mislead consumers and divert resources away from those who truly contributed to sales.

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