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YouTuber MegaLag posted a 23-minute video uncovering alleged scams by PayPal-owned browser extension Honey.
Paypal Honey is a popular browser extension marketed by major YouTubers. At first glance, the browser extension claims to automatically apply coupons on websites to help users get discounts.
YouTuber MegaLag posted a 23-minute video on December 22, talking about potential issues with the extension. He called it a marketing scam promoted by YouTube’s biggest influencers.
MegaLag claims that the browser extension scammed users and the influencers who were paid to promote the product. He estimates that Honey may have scammed millions of dollars since its release.
What Is Honey, and Why Is It Controversial?
Entrepreneurs Ryan Hudson and George Ruan founded Honey in October 2012. A prototype of the browser extension was ready by October 2012, and gained 900,000 users by March 2014. The browser extension notifies users of price drops of various items online and fetches coupons for partnered online retailers.
Honey makes its money via merchants that partner with the company. After its release, the browser extension became popular, and the founders secured a total venture backing of $40.8 million by January 2018. Paypal, the payment service provider, acquired Honey in January 2020 for an estimated $4 billion.
MegaLag investigated the browser extension and found some potential problems with its practices. He reported that Honey promotes specific discount codes exclusive to business partners while ignoring better offers.
He criticized the app for not delivering the best value to customers. Additionally, he raised concerns about Honey’s affiliate marketing practices. The extension allegedly cut-off influencers and platforms from earning commissions via affiliate links.
How the Extension Allegedly Stole Money From Influencers
MegaLag explained how cookies and referral links work to show how Honey is allegedly scamming influencers. Using Linus Tech Tips as an example, he said that if someone purchases a computer part from Newegg, Linus will receive a commission.
Even if a user closes the purchase tab and returns to it later, the commission goes to Linus Tech Tips. This happens because web browsers save affiliate data in affiliate cookies temporarily.
Markiplier was right about Honey all along pic.twitter.com/kijvSvvpKq
— Sean (@ForTheWinTCG) December 22, 2024
MegaLag showed that if customers use Honey to apply discounts, the extension removes influencer affiliate tags and replaces them with their own. The YouTuber contacted Honey, and a representative confirmed that the feature was intended.
According to MegaLag, Honey is committing fraud. He said:
“Paypal (Honey) offered zero value to the customer, and yet they were rewarded for the sale. Because all of this is happening online behind clicks, cookies, and tracking data, there is little to no transparency that this is ever happening.”
PayPal Rewards and Honey Gold Controversy
Paypal Rewards, formerly known as Honey Gold, is a cashback program that poaches affiliate money. MegaLag made two separate purchases at NordVPN. He used his affiliate link in one of the purchases and PayPal Rewards for the other. When using PayPal Rewards, MegaLag lost $35 in commission because Honey replaced the affiliate attribute. Instead, he received $0.89 as cashback.
In an old Linus Tech Tips forum post, one of Linus’ employees said that the channel stopped working with Honey. CPotter, who is an administrator in the forums, said:
“We ended the partnership with Honey due to the way their service interacted with affiliate links. Essentially, if someone clicks on an affiliate link, and then if they search for a deal, Honey will override the tracking link even if they don’t find you a deal. This didn’t jive with us, so we ended the partnership.”
So, @LinusTech, the third biggest promoter of the @Honey extension on YouTube since 2017, found out it was a scam in 2022 (or earlier), and only stopped working with them—didn't even call out the scam.
— ㆅ (@howfxr) December 22, 2024
Is this guy legit? 😵 https://t.co/3YhEybR0Gw pic.twitter.com/JWaWZrvXFE
MegaLag expressed disappointment in his video regarding Linus Tech Tips not making the discovery more public. The Youtuber claimed that if the news of the allegations reached more people, it could have helped influencers and customers. He also teased a follow-up video showing how the browser extension is allegedly stealing money directly from businesses.
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