The Honey Trap - Lecture Notes

Introduction to Honey

• Honey is a free browser extension designed to automatically apply coupon codes during online checkout.
• Marketed as a way to save money effortlessly, labeled as "free money."
• Owned by PayPal, acquired for $4 billion.

Allegations Against Honey

• Claims that Honey is a scam, misleading consumers and influencers alike.
• Accusations include advertising and affiliate fraud, data theft, deception, coercion, and extortion.
• The investigation is based on multiple years of research and evidence review.

How Honey Allegedly Steals Commissions

Scenario 1: Affiliate Link Hijacking

• Example: Influencer (like Linus Tech Tips) shares a product link.
• Honey replaces influencer's affiliate cookie with its own upon checkout by simulating a referral click.
• This action results in PayPal Honey receiving the commission meant for the influencer.

Scenario 2: Honey Gold/PayPal Rewards

• Functions as a cashback mechanism.
• Encourages users to click for "rewards," ensuring Honey gets the last-click credit for sales.
• Example test showed Honey keeping most of the affiliate commission, sharing a minimal portion with users.

Scenario 3: Manipulative Tactics

• Even when Honey has no codes or deals, it pops up misleadingly to capture last-click credit.
• Uses tactics like promoting checkout with PayPal to hijack commissions.

Underlying Issues in the Industry

• Last-Click Attribution: Industry standard that awards commission to the last click before a sale.
• Honey exploits this by ensuring it is the last click in the purchasing process.

Linus Tech Tips Involvement

• Initially one of Honey's biggest promoters.
• Ended partnership due to Honey's interference with affiliate links.
• Lacked public communication on the issue, leading to missed warnings to other influencers.

Honey's Misleading Advertising

• Claims to find the best deals and coupon codes automatically.
• Insider info reveals that partnering stores can restrict which codes are shared.
• Consumers often misled about the "best deals" being offered.

Investigation Findings

• Honey’s tactics often result in poor deal discovery for users.
• Honey branded coupon codes are sometimes the only ones available.
• Stores can control the discount codes made available through Honey.

Conclusion

• Honey has been involved in questionable practices, misleading consumers and influencers.
• The community of creators and consumers has been significantly affected by Honey's operations.
• Further research may uncover more unethical practices and financial impacts.

Next Steps

• Continuous investigation into Honey’s business practices and their implications on the online shopping and affiliate marketing industries.