Coupon Finder is accused of “exploiting” influencers

Honey is an internet browser extension that promotes finding and redeeming coupon codes for online shoppers.
PayPal acquired Honey in 2020 for $4 billion.
YouTube tech journalist MegaLag posted a video on December 21 accusing Honey of scamming influencers.
MegaLag accused Honey of violating content creators’ affiliate links, providing limited coupon codes, and publishing dishonest advertisements.

A YouTube creator is accusing PayPal of fraudulent behavior in connection with the Internet browser extension Honey, which promotes the search and application of voucher codes for online shoppers.

YouTube creator MegaLag posted a video on Dec. 21 titled “Exposing the Honey Influencer Scam,” in which he accused Honey, owned by PayPal, of deceiving consumers and influencers by hijacking links that influencers pay for products they promote, offer limited coupon options, and post inaccurate advertisements.

The 23-minute video, the first of a three-part series according to MegaLag, had more than 9.4 million views as of Thursday morning. The video ends with what looks like a teaser for a follow-up.

“It wouldn’t surprise me if this were considered one of the most aggressive and shameless marketing scams of the century,” MegaLag said in the video.

In response to the video, Amy Bonitatibus, PayPal’s chief corporate affairs and communications officer, provided the following response to USA TODAY:

“Honey is free to use and offers millions of shoppers additional savings on their purchases whenever possible. Honey helps merchants reduce cart abandonment and comparison shopping while increasing sales conversion. Honey follows industry rules and practices, including last-click attribution.

MegaLag declined to comment when contacted by USA TODAY.

Here’s what you should know about the allegations made by MegaLag and how they align with industry standards.

What is honey?

Honey is a free browser extension that claims to find coupon codes during the online shopping process.

According to a press release from PayPal, Honey was launched in 2012 and was purchased by PayPal in 2020 for approximately $4 billion.

When PayPal acquired Honey, PayPal’s press release said the shopping tool served about 17 million monthly active users and helped consumers save about $1 billion annually.

After purchasing Honey, PayPal introduced PayPal Rewards, which incentivizes use of the Honey extension. According to the Honey website, PayPal users earn points when they use the browser extension, even if they don’t redeem coupons. These points can be used to redeem cashback, PayPal shopping credit or gift cards.

In the video, MegaLag referred to this rewards program as a “lame cashback program.”

The creator then provided an example of how much money they made from an affiliate link compared to PayPal Rewards Cashback on the same purchase. MegaLag provided an example implemented through Honey Gold, Honey’s previous rewards program used prior to PayPal’s purchase.

When purchasing a standard NordVPN package (about $95) through its own affiliate link, MegaLag said it made about $35 from the sale. By purchasing the same package but activating PayPal Rewards instead of using its affiliate link, MegaLag reported earning about 89 cents in cash back.

Not the first creator to speak out

In the video, MegaLag mentions that when researching Honey, there was virtually no additional information on the topic.

However, since the video gained popularity, a clip has resurfaced of YouTube creator Markipiler talking about Honey during a Twitch stream in 2020.

Mark Fischbach (the inventor of Markipiler) did not elaborate, but expressed his “distrust” of the shopping tool.

“I think they even offered me (a brand deal) and I said no because I just don’t trust Honey,” Fischbach said during the stream. “I have a feeling that in a few years there will be the big Honey conspiracy like there is in 2022.”

The day after the MegaLag video was released, Fischbach reposted his stream clip on X with the comment: “I KNEW IT!!!”

Violating affiliate links or last-click attribution?

In the video “Exposing the Honey Influencer Scam,” MegaLag accuses Honey of violating affiliate links.

MegaLag sets up the following example: If a consumer clicks on an affiliate link in the description of a YouTube video, they are redirected to the corresponding website. If the consumer makes a purchase through this link without Honey, the YouTube creator receives a commission.

In real-world scenarios, an affiliate link is similar to a salesperson helping a customer in a store. For example, if a department store salesperson helps a customer find and purchase a piece of jewelry, the salesperson receives a commission.

When a consumer has the Honey browser extension installed and accepts a Honey popup – be it a coupon offered by the shopping tool or just a message saying Honey didn’t find any coupons – Honey receives a commission from the online purchase. The YouTube creator whose affiliate link the consumer originally followed will not receive any commission.

This model is called “last-click attribution” and indicates the last touchpoint a user interacts with before making a purchase. Although there are other types of attribution – such as first-click, which pays a commission for the first point of contact that is interacted with – last-click is considered the industry standard.

In the video, MegaLag claims that Honey is “exploiting” last-click attribution. When it comes to comparing content creators versus content creators, last-click attribution is usually fair, according to MegaLag, but when it comes to content creators and Honey, “there is no real competition.”

“Honey shows up right at the end of your buying journey and virtually guarantees they’ll win the last click,” MegaLag says in the video. “Of course they know this and are doing everything they can to get the last click. Even if there are no voucher codes.”

Another industry standard in affiliate marketing is the stand-down policy. This policy, implemented by host sites, in this case a retailer, requires that browser extensions respect affiliate marketing. If a retailer adopts a stand-down policy, extensions like Honey cannot claim credit even if they are the final point of contact, according to Wildfire, a fintech company that offers white-label cashback services.

In response to the MegaLag video, YouTube creator Hank Green released a video titled “The Honey Scam and the Ridiculous Mess of Affiliate Marketing” on December 25th. In his video, Green discussed how affiliate marketing works in the “small business ecosystem.”

Green said the ecosystem of small business founders looking to make money and interested in affiliate marketing is “ripe for exploitation.”

“How responsible should creatives be about understanding the business models of the companies they sign brand deals for?” Green posed in his video. “I’m sure a lot of YouTubers aren’t really smart enough or don’t have the time to do this work. The brand deal ecosystem is where most of the money comes from for most YouTubers, so it can be really hard to say.” No, and it can be really easy to not think too hard about how things work .

Ultimately, Green, like MegaLag, claimed that Honey and PayPal were taking advantage of content creators.

USA TODAY reached out to experts to get more context on industry best practices.

Where does Honey get vouchers from?

MegaLag also accused Honey of only offering limited coupon codes and not giving customers the best options.

In the video, MegaLag said he was often able to find redeemable coupon codes from other shopping tools like RetailMeNot when Honey said no coupons could be found.

PayPal’s Bonitatibus told USA TODAY that merchants ultimately decide which coupons to offer to consumers through Honey.

As for how its vouchers are sourced, Bonitatibus said they are collected manually by the Honey team, sourced from deal networks, made available through merchant partnerships and sourced from users who share codes with Honey.

Previous advertising concerns

In the video, MegaLag also accused Honey of publishing dishonest advertisements claiming that the shopping tool searches for all available coupon codes, meaning that a customer using Honey does not have to search for their own coupons.

In 2020, the National Advertising Division opened an investigation into a Honey advertisement that claimed, “With just one click, Honey finds any working code on the Internet and applies the best one to your shopping cart,” according to a BBB National statement Release Programs message.

However, after opening the investigation, Honey notified the National Advertising Division that it was in the process of discontinuing advertising for “business reasons,” according to a press release from BBB National Programs. Honey also agreed to permanently discontinue such advertising. This concluded the National Advertising Division’s investigation.

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