PayPal Honey Scam: All the Controversy

PayPal’s Honey browser extension, long celebrated for simplifying online coupon hunting, is now under fire as a potential scam. YouTuber MegaLag first accused it of stealing money from influencers through last-click attribution, where Honey swaps tracking cookies to claim commissions. A year later, a follow-up video revealed targeting of minors via sponsorships like Mr Beast, unauthorized data collection on non-users, and exploitation of small businesses by misusing private coupon codes.

Emails show Honey pressuring affected businesses to partner after revenue losses. PayPal defended its practices as industry standard in 2024 statements, but discontented creators, including Legal Eagle and GamersNexus, have filed lawsuits. The scandal has broader ripples, intersecting with Steve Ballmer’s controversies, prompting Google to revise Chrome extension policies. This ongoing exposé highlights ethical concerns in affiliate marketing and data privacy.

Honey, a PayPal-owned browser extension, gained popularity for automatically applying coupons during online shopping. Users appreciated its convenience in saving money on purchases across various retailers.

In 2024, YouTuber MegaLag released a video accusing Honey of “stealing money from influencers.” The investigation focused on Honey’s use of last-click attribution, a method where the extension replaces other affiliates’ tracking cookies with its own upon user interaction, redirecting commissions away from original promoters.

This practice, while common in the industry, drew criticism for undermining content creators who drive traffic to deals. PayPal responded by stating it follows “industry rules and practices” like last-click attribution, emphasizing compliance with standard affiliate marketing norms.

One year after the initial video, MegaLag followed up with revelations about Honey’s broader tactics. The second exposé claimed Honey targeted minors through sponsorships with YouTubers boasting large young audiences, such as Mr Beast.

Data Collection Concerns

The video highlighted Honey collecting data on individuals who never signed up for the service, raising privacy issues in how the extension monitors browsing habits without explicit consent.

Impact on Small Businesses

A series of emails between Honey and small businesses illustrated revenue losses from the extension’s use of private coupon codes. Businesses reported diminished earnings as Honey intercepted deals meant exclusively for their partners.

Further, Honey allegedly attempted to squeeze these businesses into signing up as partners, leveraging the losses to gain affiliations. This approach exploited vulnerabilities in smaller operations unable to compete with such tactics.

Creators potentially deprived of earnings expressed widespread dissatisfaction with Honey’s methods. Several YouTube channels have taken legal steps against PayPal.

• GamersNexus is leading a new class action lawsuit targeting the extension’s practices.
• YouTuber Legal Eagle filed a suit specifically over PayPal’s Honey extension, citing financial harm to influencers.

These lawsuits underscore accusations that Honey’s deal-hunting features rip off both customers and YouTubers by prioritizing its own profits over fair attribution.

The backlash reflects growing scrutiny on how browser extensions handle user data and affiliate revenues in the digital economy.

The Honey controversy extends beyond PayPal, intersecting with other scandals. For instance, Steve Ballmer’s Kawhi Leonhard controversy overlaps with elements of this exposé, amplifying discussions on corporate ethics.

The Honey exposé fallout continues to unfold, with ongoing coverage of its implications. Google has changed Chrome extension policies in response to the Honey link scandal, aiming to address similar tracking and privacy issues.

Accusations portray Honey’s browser extension as ripping off customers and YouTubers alike, prompting calls for greater transparency in coupon and affiliate systems.

Conclusion

This scandal reveals deep flaws in the affiliate marketing landscape, from cookie manipulation to unauthorized data practices. As lawsuits progress and policies evolve, PayPal faces pressure to reform Honey, potentially reshaping how browser tools operate ethically in e-commerce.