A new controversy has erupted surrounding the popular browser extension, Honey, which has been accused of misleading both consumers and influencers. On December 21, YouTuber MegaLag released a video titled "Exposing the Honey Influencer Scam," where he claimed that Honey, owned by PayPal, misappropriates affiliate links that pay influencers and provides limited coupon options, leading to misleading ads. The video, which has garnered over 9.4 million views, is the first part of a three-part series.
In his video, MegaLag claims that Honey's marketing practices may be one of the "most aggressive, shameless scams" of this decade. While these accusations are strong, PayPal, the company behind Honey, has denied the allegations and defended the extension's business model.
What is Honey?
Honey is a browser extension that automatically applies coupon codes during online shopping, helping users save money. Acquired by PayPal in 2020 for $4 billion, Honey was first launched in 2012. It became especially popular for its ability to automatically find and apply the best discount codes at checkout. After PayPal’s purchase of Honey, the extension expanded, and PayPal introduced the PayPal Rewards program, allowing users to earn points for Honey purchases, which could be redeemed for cashback, PayPal credits, or gift cards.
Accusations Against Honey
MegaLag’s main criticism revolves around Honey's PayPal Rewards program. He referred to it as a "lame cashback scheme," comparing his earnings when using affiliate links versus the rewards program. In an example, MegaLag showed that purchasing a $95 NordVPN subscription through his affiliate link earned him around $35 in commission, while the same purchase using PayPal Rewards only netted him 89 cents in cashback.
Another point raised by MegaLag was Honey's limited selection of coupons. He claimed that Honey often failed to find coupons where other sites, like RetailMeNot, offered better deals. In response, PayPal stated that Honey's coupon selection is based on partnerships, deal networks, and user submissions, and that it is up to merchants to decide which coupons Honey can display.
MegaLag also criticized past Honey advertisements, particularly one suggesting that the platform could find "every working code on the internet," making it seem as though Honey could automatically find all available discounts. This led to an inquiry from the National Advertising Division (NAD) in 2020. Although Honey discontinued the ad voluntarily, the NAD pointed out that such a claim was misleading.
PayPal’s Response
Despite the backlash, PayPal has defended Honey. They emphasized that Honey follows industry standards, including the common affiliate marketing practice of "last-click attribution." Amy Bonitatibus, PayPal’s Chief Corporate Affairs and Communications Officer, stated that Honey is a free tool helping shoppers save money and helping merchants reduce cart abandonment by driving sales.
Though the video has sparked a lot of conversation, PayPal has yet to admit to any wrongdoing. As this controversy continues, it remains to be seen how it will impact Honey’s reputation and its competition in the online shopping tool market.
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