In a serious accusation, a YouTube creator accused PayPal’s browser extension Honey of misleading both consumers and influencers. In a video posted on December 21 titled “Exposing the Honey Influencer Scam,” YouTuber MegaLag claims that Honey hijacks affiliate links that pay influencers to promote products, offers limited coupon options, and posts misleading advertisements. The video, part of a three-part series, has been viewed over 9.4 million times.

In the video, MegaLag describes what he believes is a fraudulent practice and explains that he wouldn’t be surprised if this situation turned out to be one of the “most aggressive and shameless marketing scams of the century.” However, PayPal has responded to these allegations, defending Honey’s business model and denying any fraudulent behavior.

What is honey?

Honey, a browser extension that helps users find and apply coupon codes when shopping online, was acquired by PayPal in 2020 for about $4 billion. Originally launched in 2012, Honey claims to help users save money on their online purchases by automatically applying the best available coupons at checkout. After being acquired by PayPal, the tool has grown significantly and PayPal has introduced PayPal Rewards to encourage continued use of Honey. Users can collect points when using the extension, which can later be redeemed for cashback, PayPal credit or gift cards.

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However, MegaLag criticized this rewards program, calling it a “lame cashback program.” He also shared a comparison of his earnings from using his affiliate link =PayPal Rewards. MegaLag showed that he earned a commission of around $35 by purchasing a $95 NordVPN subscription through his own affiliate link. In contrast, using PayPal Rewards for the same purchase only earned him 89 cents in cash back.

The video also addressed Honey’s supposedly limited coupon offers. MegaLag argued that he often found better deals on other coupon sites like RetailMeNot when Honey claimed no coupons were available. PayPal then clarified that the vouchers provided by Honey come from a mix of merchant partnerships, deal networks and user contributions. Ultimately, PayPal emphasized that it is up to merchants to decide which coupons Honey presents to consumers.

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Another point raised by MegaLag concerned Honey’s past advertising practices. He accused Honey of misleading consumers with ads suggesting that the platform would find every available coupon online, suggesting that using Honey would save shoppers from having to search for discounts themselves. In 2020, the National Advertising Division (NAD) opened an investigation into a Honey ad that claimed it could find “any working code on the internet.” However, after the investigation was launched, Honey told the NAD that it had already stopped advertising for “business reasons” and agreed to permanently stop running misleading ads.

Despite these concerns, PayPal maintains that Honey follows industry standards and practices, including “last-click attribution,” a common method used by affiliate marketing programs. Amy Bonitatibus, PayPal’s chief corporate affairs and communications officer, defended the tool, saying that Honey is free to use and helps both shoppers save money and merchants increase sales by reducing cart abandonment.

While MegaLag’s video has garnered a lot of attention with millions of views and heated debate, PayPal has not admitted any wrongdoing. As the situation progresses, it remains to be seen how these allegations will impact Honey’s reputation and its place in the competitive world of online shopping tools.

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