By now, you've probably heard about Honey. You know, the browser extension that saves you money. Do you have Honey installed? What's Honey?
Oh, no, no, no. Honey. Honey is a free browser extension.
Free browser extension. Free browser extension. Free browser extension. That automatically applies coupon codes when you check out online. Free money, basically.
It's literally free money. It doesn't make sense to not be using this. So what's the catch?
There is no catch. Join Honey. Join Honey.
Honey, honey, honey, join Honey! Yeah, I hate to break it to you, but your favorite influencers sold you a lie. Honey is a scam, and the majority of claims promoted by those influencers aren't even remotely true.
But it gets worse. Honey hasn't just been scamming you, the consumer. They've also been stealing money from influencers, including the very ones they paid to promote their product. And I'm not just talking about a few bucks here. I believe this scam has likely cost content creators millions of dollars.
Sound crazy? Well, I didn't believe it at first either, until I experienced it myself, first hand. In fact, I'm confident this might just be the biggest influencer scam of all time. Which is insane, considering Honey is owned and run by PayPal, who purchased this company for $4 billion.
This three part series is the result of a multi-year investigation, where I believe I've uncovered signs of advertising fraud, affiliate fraud, the illegal collection of personal data, deception, lies, coercion. extortion, the list goes on. I've reviewed hundreds of documents, adverts, sponsorships.
I've reviewed emails between honey and merchants, interviewed victims. Believe me, this runs deep. Now I want to be clear, the views, allegations and conclusions expressed in this series are my opinions, based on evidence I have gathered which will be shared throughout.
With that said, ladies and gentlemen, this is The Honey Trap. Now I know what you're thinking, it's a free browser extension, how bad could it be? Well trust me, it's far more sinister than you might think.
You know what they say, if a product's free, it's likely you're the product. And as you'll find out later in this investigation, that remains true for PayPal honey. Now, like most people, I too fell for the lies.
I mean, what's not to love about a free browser extension that saves you money? It's a compelling product, and with the endorsement from what feels like every single popular influencer on YouTube, it's no wonder millions of people downloaded it. Ironically, the very influencers promoting Honey seemingly had no idea the company was quietly picking money out of their very own pockets.
Well, at least one of them realized, but we'll get to that later. So let me show you how Honey's been stealing money from influencers. So let's say you're watching a video on YouTube. If you're into tech like me, maybe you're watching a Linus Tech Tips video. Linus tells you about this free browser extension that saves you money online, you install it in two clicks, and boom, you have honey.
Perfect timing, because it just so happens you're looking to buy a new CPU for your computer. You come across another Linus Tech Tips video, and after watching, you're convinced you should buy the one recommended in his video. So you scroll down and find Linus'affiliate link to that product. Now, for those of you who don't know, when you click an affiliate link and buy something, the influencer who promoted the product Earns a commission for referring you to that store So you add the product to your cart, get to the checkout page and hello! Honey says they found you 10 coupon codes Sweet!
You click apply discounts and Honey gets to work, but unfortunately none of the coupon codes worked Doesn't matter though because as Honey has promised us for years that means we know we've got the best deal So you complete your purchase, you're happy your new CPU is on the way, Linus is happy he's getting his commission Everyone's happy, right? Well, let's quickly rewind and see what was happening behind the scenes. You see, after clicking Linus's affiliate link, you'll notice in the URL, there's a tracking tag labeled short circuit.
That's a reference to one of Linus's YouTube channels, and this tracking tag is how Newegg knows who to pay a commission to. We can also see that this tracking tag has been saved on my browser in the form of a cookie that will expire in 30 days. That way, if we only decide to complete the purchase a few days later, Linus will still be credited the sale.
It's kind of like when you're at a department store buying a TV and the salesman who helped you gives you a referral card or a receipt with their name on it so when you eventually get to the checkout counter the clerk knows which salesman to award the sale to. You can think of affiliate cookies as a digital version of that. So what happened when we got to the checkout page? Well once honey popped up watch what happened to Linus's affiliate cookie after we clicked apply discounts. You see that?
Honey came in, removed Linus'affiliate cookie, and replaced it with their own, claiming credit for the sale, and pocketing the commission money for themselves. Yeah. Now, if we quickly go back again, we can see what's causing this to happen.
After clicking Apply Discounts, what you'll notice is that in the top left corner of your browser, Honey discreetly opens a small new tab, which acts like a simulated referral click, as if they were the ones to refer you to the website, even though you're already on the website and at the checkout page. Once that page has finished loading and has stuffed PayPal's affiliate cookie, the tab automatically closes, leaving you blissfully unaware that anything ever happened. It's very sneaky. Now when I first discovered this was happening I thought there's no way.
Why would all these high profile influencers be promoting a company that is actively poaching their affiliate commissions? It didn't make any sense. So to make sure I wasn't going crazy I went on a honey testing spree. Clicking one affiliate link after another and it kept happening. But even after all those tests I scoured the internet to see if anyone was talking about this and found nothing.
Okay, there was this one debate about it on the Y Combinator forum, but nothing concrete. Besides that, virtually nobody was talking about this, adding fuel to my doubt. So I figured, screw it, I'll reach out to Honey and ask them directly.
And sure enough, they came back to me with the following. If Honey is activated and is the last program used while shopping on a site, it is likely Honey will receive credit for the purchase. I was right, and just like that, my investigation into Honey began. Now some might consider what PayPal's doing here dirty or highly unethical, but personally I can't see how it's anything short of fraud. I mean, just imagine something like this happening in a real world scenario.
Let's say you're at a department store looking to buy a new TV. A salesman spends time running you through your options. You decide to buy, he gives you his referral card, you get to the checkout, and right as you're about to pay, a sleazy salesman pops up going, hey, should I check if I have any coupon codes for you? Naturally, you say sure. He snatches your referral card without you ever noticing, looks for coupons, says sorry no luck this time But instead of handing back the original referral card, he hands back his own.
PayPal didn't refer the customer to the store They didn't promote any of the products, the salesman did that. PayPal provided absolutely zero value to the customer, yet they were rewarded for the sale. But because this is all happening online, buried behind clicks and cookies and tracking data There's little to no transparency that this is ever happening Okay, but what if Honey had found a working coupon code?
Would that make it okay for them to claim the commission? Honestly, no, I don't think so. The fact remains that Honey didn't refer the customer to the store, nor did they promote the product.
Look, don't get me wrong, I'm a consumer myself. Saving money matters, especially when money's tight. But this scam doesn't just affect wealthy influencers.
There are hundreds of thousands of small creators, bloggers, artists, who rely on affiliate commissions to support their craft. Sure, you could argue that Honey may have convinced the consumer to complete the purchase by providing a discount. But let's be real, if you're already at the checkout with your items in your cart, you already have a high intent to purchase. And again, this would never fly in a real life sales environment. No department store is going to allow a salesman to hang out at the checkout counter casually handing out coupon codes while simultaneously stealing commissions from the other sales reps. So why are we allowing a corporate giant like PayPal to do it on the internet?
Now believe it or not, this first example I just showed you with Linus It's just one of three scenarios in which Honey poaches affiliate commissions and the next scenarios are even worse But before I show you how bad scenario 2 is, it's important you understand the fundamental system Honey is exploiting You see in affiliate marketing, there's this thing called last-click attribution Which basically means last-click wins. For example, you might click on a shoe bloggers affiliate link for a pair of Nikes But you don't buy right away Later, you click on a YouTuber's link for the same shoes and complete the purchase. In this scenario, the YouTuber gets the commission and the blogger gets nothing.
There are other models like first click where the blogger would win the commission or dynamic click where the commission is shared. But the industry went with last click because while it's not always the fairest, it's the easiest to implement. Therefore, it became the industry standard. Now when it's blogger versus YouTuber for a sale, honestly, I'd say last click is usually fair. But when it's anyone versus Honey, there's no real competition.
Honey pops up right at the end of your purchasing journey, virtually guaranteeing they'll win that last click. They of course know this and do anything they can to get that last click, even when there's no coupon codes to offer. Which brings us to scenario two.
Honey Gold, which is now called PayPal Rewards. Here's how it works. When you get to the checkout and Honey Gold is available, Honey pops up and is essentially saying, Hey you, consumer, click this button here so PayPal can claim the commission for the sale, and we'll share a portion of that commission money with you in the form of points.
It's basically a lame cashback scheme. And it's genius because if there are no coupons to offer but the store is participating in Honey Gold, it gives Honey another reason to get that last click. How can YouTubers, bloggers or any other type of affiliate fairly compete against this type of mechanism?
Of course the consumer is going to click and of course they're going to win the sale. Now this got me thinking, how much of their commission are they actually sharing with users? Well to find out, I decided to put Honey Gold to the test.
So I looked for any website where honey gold was offered and found it on NordVPN. And no, this is not a sneaky sponsorship. So I signed up for NordVPN's affiliate program, which offers 40% commission on successful referrals.
After getting approved into the program, I received a custom affiliate link for my YouTube channel. Using this link, I made two separate purchases. For the first, I activated honey gold.
And sure enough, you can see my affiliate cookie was replaced with honeys. And for the second, I didn't activate honey gold. As expected, I was awarded a $35 commission for the sale where Honey Gold wasn't activated and received nothing when Honey Gold was activated.
For the first time, I experienced Honey poaching my own affiliate commission. So how much of my stolen $35 commission did PayPal sharers cash back with my Honey account, aka the consumer? Brace yourselves, 89 points, which is equivalent to 89 cents USD. That's right.
Honey poached a $35 commission for doing nothing and rewarded me a grand total of $0.89. Thanks PayPal, you really shouldn't have. No seriously, you really shouldn't have.
Now, on to scenario 3. For you ladies out there, let's say you're looking for a new outfit. Your favorite influencer tries on something that slays, you click on their affiliate link and get to the checkout. But in this scenario, Honey knows it has nothing to offer.
No coupon codes, no Honey Gold. Yet it still pops up to announce absolutely nothing. Annoying as f**k.
Naturally you click the got it button to get rid of the annoying dancing coin and whoa what's that? PayPal takes the sale. Why?
Because f**k you Mary that's your commission. But wait there's more. My personal favorite is when Honey has nothing to offer so pops up offering you to check out with PayPal. Even though the option is already available at the checkout page. And of course if you click the checkout button, PayPal poaches the sale.
Classy. As I was saying, Honey uses any excuse possible to get that last click from the user. It's absolutely disgusting.
I can't even begin to fathom how much money has been lost at the hands of this browser extension. Imagine being the influencers who promoted Honey, telling your audience who by the way, are the most likely to use your affiliate links to download an app that poaches your affiliate sales. It's crazy! Now to be clear, not every influencer who promoted Honey engages in affiliate marketing, so those who don't are obviously unaffected. But did any of the influencers who are engaging in affiliate marketing ever catch on to what Honey's been doing?
Well it turns out yes, at least one of them did. Linus Tech Tips, who have been promoting Honey since 2017. So here's how I found this out. You see, one day I was browsing Linus'forum to see if anyone had raised the red flag about Honey. And sure enough, back in 2020, someone sounded the alarm, but it was ultimately ignored.
However, in 2022, a different user noticed that LMG were no longer promoting Honey and asked the team if they had been dropped as a sponsor. To which one of Linus'employees responded with, We ended the partnership with Honey due to the way their service interacted with affiliate links. Essentially, if someone clicked on an affiliate link, and then they use Honey and search for a deal, Honey will override that tracking link even if they don't find you a deal. That didn't jive with us, so we ended the partnership. Okay, so they had no idea this was happening and it took them several years to catch on.
That's quite telling because we're talking about a tech-savvy YouTube channel that's run by a very large team. The fact that it took them several years to figure this out, in my opinion, really underscores the deceptive nature with which Honey operates. If Linus and his team didn't know, I can't imagine many other influencers would have known either. Now I have to say as a long time viewer and supporter of Linus'channel, I'm incredibly disappointed they weren't more public with this discovery.
I get this specific issue doesn't directly affect their viewers, but surely they must have realised the wider impact this could be having on the creator community, a community they're a part of. I think that matters. And it's not as though they only promoted Honey once or twice.
They did approximately 160 sponsored segments, all of which remain live on YouTube. Those videos have accumulated around 194 million views. According to my data that makes Linus's company LMG the third largest promoter of honey on YouTube.
So yeah, in my opinion, they should have made more noise about this. But what's truly baffling to me is that after LMG ended their partnership with Honey, they then went ahead and partnered with a company called Karma Now, a coupon browser extension that literally engages in similar behavior. Now, I did reach out to LMG about this situation, and I'll be honest, their response was not to my satisfaction. They didn't address the majority of my questions.
However, they did at least provide some important context about their dealings with Honey. LMG stated that, As soon as these issues with Honey were brought to us, we tried to work with them to remedy them. After a few calls, we were informed that they weren't willing to change, so we stopped working with them across all channels. So let me get this straight, one of Honey's biggest promoters goes to them and says, Hey can you please stop overriding our affiliate links?
And Honey effectively goes, Nah, not happening. Assuming I've got that correct, and if true, that just goes to show what little regard Honey has not only for content creators, but also their partners. Now as for LMG's less than ideal response, I did press Linus's team to address the rest of my questions, but never heard back from them. But it's time to shift gears because unfortunately this scam runs much deeper than stolen affiliate commissions.
It's time we talk about how Honey used these influencers to sell you a complete lie. How they sold you a product that was doing the opposite of what they promised. You see, As I was testing Honey across different stores, I was encountering a reoccurring issue. When I reached the checkout page, Honey would claim it couldn't find me any coupon codes. Yet when I searched manually, I found working codes with ease.
And even when Honey did find me a code, I was often able to find another code of better value. Kind of strange, given their claim that Well thanks to Honey, manually searching for coupon codes is now a thing of the past. Another oddity was that Honey would often only find me Honey branded coupon codes, such as Honey 5 or Honey 10. Why would a store only have Honey branded coupon codes?
Kind of weird, right? But the biggest red flag was that when I tried submitting the better coupon codes I'd found, Honey wasn't adding them to their database. So why not? Well, eventually I figured out what was going on. It turns out that one of the key benefits for stores partnering with Honey is that they are given full control over which coupon codes go live on the platform, if any at all.
I discovered this while listening to a podcast produced by Honey, which appears to be aimed at attracting new businesses to joining their platform. In this podcast, an employee from the Australian clothing store, Princess Polly, discusses the benefits of partnering with Honey. What would you say to any brand that has considered working with Honey but hasn't yet?
I would say missing out on converting customers. Like I said before, Gen Z is super discount savvy. You can't ignore the fact that they will hunt for like discount codes and they might find a better deal.
With Honey, you can also control the discount code percentage, which means like they will potentially find a higher discount code on the internet. It literally lets you control like the customer journey, convert and control like the discount code percentage as well. This is insane. She's basically saying Honey is great for businesses because it encourages users not to bother hunting for coupon codes and it allows businesses to control which coupon codes are shared with consumers. Now, I was able to further verify this.
on Honey's website, specifically the FAQ page for partners, which clearly states, as a partner, you have control over the content hosted on the Honey platform. So yes, even if Honey knows of a coupon code that offers say 20% off, but a partnering store tells them, hey, only share a 5% off coupon, then that's the only discount Honey will apply to your cart at the checkout page. I mean, holy shit, Honey wasn't finding you the best deals possible, they were intentionally withholding them from you. for their own financial gain.
This completely invalidates Honey's core value proposition to consumers. For years they sold you the lie that they would find you every working coupon code on the internet and apply the best one to your car. But nope, complete and utter lie. They have literally been feeding you coupon codes that were approved by the partnered stores who were paying them.
And can I just say the double messaging here is hilarious because on one hand Honey has appealed to consumers by promising to find the best deals possible But on the other hand they appeal to businesses claiming that honey helps prevent consumers from finding the best deals It's absurd now when you think about it. This all makes complete sense I mean why would any online business pay honey for sharing their highest value coupon codes with its 20 million users that's not an appealing partnership whatsoever. So To make a partnership more attractive, Honey told businesses, hey, if you partner with us and pay us an affiliate commission, we'll let you control which discount codes are shared on our platform.
And we'll tell our consumers we scoured the internet and found them the best deal possible. Everybody wins! Just not the consumers or the influencers. With this discovery, I decided to do a thorough audit of Honey's advertising campaigns.
And yikes! The ads, the sponsorships, everywhere you look, it's lie after lie. I wouldn't be surprised if this ends up going down as one of the most aggressive, shameless marketing scams of the century. Just look at this insane list of videos that were sponsored by Honey. According to my data, They sponsored almost 5,000 videos across roughly a thousand different YouTube channels racking up an unbelievable 7.8 billion views.
It's crazy. So now that we have a clearer picture of how honey operates Let's reflect on some of their claims Honey will find every working code on the internet and apply the best one to your cart If honey can't find a discount code for you, then you can rest assured. There's not a single discount or promo code on the internet it's a free browser extension that automatically finds you the best promo code for anything you purchase online you literally don't spend money honey searches the known internet for every promo code ever used this means you always get the best deals without even trying what honey does is take money and they put it in your pocket if there is any way to save money on your purchase they'll find it getting you the lowest prices possible at checkout you are always gonna get the best deal no matter where you're shopping amazon ebay best buy doesn't matter Honey's got your butt covered.
If Honey can't find a code, you have the best deal. It really puts into perspective just how shady this company is, doesn't it? Now, believe it or not, the Better Business Bureau launched an inquiry into Honey's advertising claims.
But after Honey immediately discontinued the claims for, quote, business reasons, the BBB decided to drop the case. Honestly, at this point in my investigation, I thought I'd seen the worst of it. I thought I understood the full picture of Honey's shady business model. But here's the thing. What I haven't told you is that there were instances where Honey would actually work really well, finding me incredible discounts that seemed almost too good to be true.
Now, it wasn't very often, but enough to confuse me. And there were even times when they weren't poaching affiliate commissions by claiming the credit for sales. These inconsistencies bugged me. It didn't add up with everything else I had discovered.
It was clear I was missing something. Well, once I finally figured out what that was, I uncovered an even darker side. I haven't even looked into how far back it went. At the end of the day, you need to make the numbers work.
And if honey is going to steal 10% of your revenue all the time, you're going to have to raise prices at the end of the day. And it's just a really awful business model. We've been so mad at them for so long.