There are a few lines that usually stand up to some scrutiny in technology. “If it’s free, you’re the product” and “If it seems too good to be true, it probably is.” A recent YouTube video from MegaLag confirms that this is the case with Honey. Honey is a “free” web browser extension (Chrome extension, Firefox extension, etc.) that is widely promoted by influencers and promises discount codes for you as a consumer. But MegaLag’s investigations have uncovered a number of shady practices that are likely costing you money.

What is Honey (the web browser extension)?

Honey was founded in 2012 before it was leaked on Reddit and went viral. By 2014, the extension had experienced explosive growth and was already used by over 900,000 users. It’s understandable why.

Online shopping also increased during this time and discount codes developed into a powerful platform for online shops. With discount codes, companies can only give their customers general or personalized discounts and thus encourage them to buy.

The promise to customers was so simple. Install Honey and ensure you always get the best deal. Honey promised to automatically apply discount codes even if you missed them. Something that has happened to me before and is extremely annoying.

As the platform’s potential grew, Honey raised millions more dollars in funding. Recognizing the potential, PayPal bought the company in 2020 for $4 billion and renamed the app PayPal Honey.

Why honey is bad for consumers

While Honey’s promise is simple, in practice the expansion actually resulted in misleading customers, benefiting both the companies and Honey. This is what MegaLag found out in its investigations.

Much of the advertising surrounding PayPal Honey has focused on always ensuring you get the best deal by simply installing the extension. Honey promised to always have the latest and greatest discount codes, so why bother searching for them yourself on the internet?

Well, I’ve worked in many eCommerce companies and I can tell you that discount codes cause as many problems as they solve. Every time a discount code is created, the same conversation takes place.

“Okay, we’ll create a 50% discount code for existing customers, but what happens if it leaks on Reddit?”

The idea behind PayPal Honey is that if a discount code leaks and works, Honey should pick it up and ensure that every customer with the extension gets that discount, even if the selling company didn’t really intend for it.

But then PayPal Honey started working with companies. This means that companies offer special Honey discounts like “HONEY10” to give 10% off. MegaLag’s video shows instances where the Honey extension promoted the 10% discount and ignored discount codes that offered greater savings.

Suddenly, the extension that promised to save you money was costing you money because it lulled you into a false sense of security and misled you with smaller discounts.

Influencers are also caught by Honey

Much of MegaLag’s research doesn’t focus on consumers at all. It actually focuses on influencers and particularly influencers who have promoted Honey, like Linus Tech Tips and Marques Brownlee.

In a pretty technical deep dive, MegaLag shows us how Honey is stealing sales credit from influencers and platforms that use affiliate marketing.

Affiliate marketing is really common, we use it here at Goosed. Basically, if we like a product, we’ll recommend a few places where you can buy it. If one of the places where you can purchase products offers affiliate programs, we will use a special link to the product on this website. You don’t pay anything extra, but this link means we receive a small percentage of the sale in return for directing you to this shop.

We didn’t notice anything concrete ourselves, but what MegaLag shows in its video is pretty shocking. When customers click on affiliate links from YouTube or a media company like us and have the Honey extension installed, Honey, through some behind-the-scenes coding magic, credits the sale back to itself and gets credit from the influencer or platform that did it all has work.

I won’t go into detail about this element, even though it is the core of the MegaLag video. I’m not pursuing a personal vendetta to protect a revenue stream for Goosed. I’m more upset about how Honey misleads consumers with cheap discount codes to protect companies.

Should you uninstall Honey?

I just uninstalled Honey, but I admit I probably wanted to uninstall it anyway. It rarely shows me actual discount codes and it wastes space on my browser’s toolbar. But this video was the last straw. When good ideas are adopted by large companies for a lot of money, the consumer rarely benefits.

Honey was a great idea when he was young. But PayPal Honey has become a Trojan horse. A Trojan horse that I’m not entirely sure who loses the most from companies, influencers and other channels or from you as a consumer.

The only thing I know for sure is that if you want to consistently get the best deals, it’s better to do some research instead of just relying on Honey.

MegaLags Honey video

I highly recommend watching MegaLag’s full video on this. It takes a little over 20 minutes but shows you the dark side of online business. As I said at the beginning, if something seems too good to be true, you should defend yourself more strongly.

Also, in part of the video, we see MrWhoseTheBoss promoting Honey while wearing a Huel t-shirt. Double warning!

If you enjoyed his video and appreciate his investigative journalism, consider joining MegaLag’s Patreon.