A YouTuber made a major accusation against PayPal’s Honey browser extension, saying it deceived influencers and customers. YouTuber MegaLag states in a video titled “Exposing the Honey Influencer Scam,” posted on December 21, that Honey publishes misleading ads, gives few coupon options, and hijacks affiliate links that compensate influencers for promoting products. Over 9.4 million people have viewed the video, which is one of a three-part series.
A browser extension called Honey helps users in finding and applying coupons when they shop online.
MegaLag explains what he considers a dishonest practice in the video, saying that he wouldn’t be shocked if this amounted to one of the “most aggressive, shameless marketing scams of the century.” PayPal, however, has addressed these charges by rejecting any fraudulent activity and defending Honey’s business plan.
What is Honey?
In 2020, PayPal acquired Honey, a browser extension that helps customers in finds and apply coupons when they shop online, for almost $4 billion. By automatically applying the best available coupons at checkout, Honey, first introduced in 2012, claims to help users save money on their online purchases. The tool has grown significantly since PayPal acquired it, and PayPal launched PayPal Rewards to promote more Honey use. When utilizing the extension, users can accrue points that can be redeemed for gift cards, PayPal credits, or money.
However, this rewards program was slammed by MegaLag, which referred to it as a “lame cashback scheme.” Additionally, he provided a comparison of his earnings using =PayPal Rewards and his affiliate link. MegaLag showed that he made about $35 in commission by using his affiliate link to purchase a $95 NordVPN subscription. In contrast, utilizing PayPal Rewards for the identical purchase only garnered him 89 cents in return.
The video also highlighted Honey’s reported restricted coupon offerings. When Honey said there were no coupons available, MegaLag countered that he frequently got better discounts on other coupon websites like RetailMeNot. In response, PayPal explained that Honey’s coupons come from a combination of user submissions, deal networks, and merchant partnerships. In the end, PayPal highlighted that merchants had the authority to choose which coupons Honey shows customers.
MegaLag also brought up Honey’s previous advertising strategies. He accused Honey of misleading consumers by claiming in ads that the platform searches for every coupon online and that using Honey would save them from having to look for deals on their own. The National Advertising Division (NAD) opened an investigation in 2020 after a Honey advertisement asserted that it could locate “every working code on the internet.” But after the inquiry was launched, Honey told the NAD that it was already pulling the “business reasons” and agreed to permanently stop running the misleading ads.
PayPal states that Honey complies with standards and procedures, including “last-click attribution,” which is a popular technique employed by affiliate marketing schemes, despite these reservations. PayPal’s Chief Corporate Affairs and Communications Officer, Amy Bonitatibus, defended the technology, saying Honey is free to use and helps companies improve sales by lowering cart abandonment and shoppers save money.
Even though MegaLag’s video has received millions of views and generated a lot of discussion, PayPal has not yet admitted any wrongdoing. It is unclear how these allegations will impact Honey’s standing in the competitive marketplace for online shopping tools as the case progresses.
