Originally Posted On: https://www.awkolaw.com/honey-influencer-scam-paypals-browser-extension/

Honey Influencer Scam: PayPal’s Browser Extension

Recent investigations have revealed troubling practices behind Honey, the popular browser extension owned by PayPal. What was marketed as a free tool to save consumers money may actually be costing both consumers and content creators in ways they never realized.

Affiliate Commission Poaching

Honey employs three main tactics to claim affiliate commissions:

1. Cookie Replacement: When users apply coupon codes at checkout, Honey discreetly opens a new tab to replace the affiliates cookies with Honey’s own, thereby taking the opportunity for commission away from the affiliate.
2. Honey Gold/PayPal Rewards: Offers users cashback points for pennies on the dollar in exchange for allowing Honey to claim the commission. In a test performed by MegaLag, Honey claimed a $35 commission while rewarding the user only 0.89 cents.
3. Unnecessary Popups: Even when no coupons are available, Honey pops up to potentially claim the last click.

Honey’s Deceptive Marketing Practices

Contrary to claims of finding “every working code on the internet,” Honey allows partnered stores to control which coupons are displayed. This means users may not always see the best available deals. As a Princess Polly representative stated,

“With Honey, you can control the discount code percentage… It literally lets you control the customer journey.”

Massive Influencer Campaign

Honey sponsored nearly 5,000 videos across 1,000 YouTube channels, accumulating 7.8 billion views. Many influencers, including Linus Tech Tips, were unaware of Honey’s practices when promoting the product.

Impact on Businesses

Some businesses report significant revenue losses due to Honey applying unauthorized discounts. This may lead to price increases to compensate for lost profits.

Legal Implications

The allegations against Honey have sparked legal action. A class-action lawsuit has been filed against PayPal, seeking damages exceeding $5 million. The lawsuit claims that Honey’s practices constitute consumer fraud by deceiving users about who earns commissions and unfairly exploiting influencers’ work.

Ethical Concerns

The Honey controversy raises important questions about transparency in influencer marketing and the ethics of browser extensions. Critics argue that Honey’s business model exploits both consumers and content creators, undermining trust in the affiliate marketing ecosystem.

Industry-Wide Impact

The Honey scandal has broader implications for the affiliate marketing industry:

• Attribution Models: The Honey platform uses a “last-click” attribution model, where all credit for a sale is given to the final interaction before the purchase. Honey exploits this system to claim commissions, often at the expense of affiliates like content creators and influencers who played an earlier role in driving the sale.
  • The controversy highlights the risks of the last-click attribution model, and may lead to calls for more equitable attribution models.
• Affiliate Relationships: Merchants may need to reevaluate their partnerships with browser extensions and similar tools to protect their affiliate relationships.
• Consumer Trust: The scandal may erode consumer trust in browser extensions and influencer recommendations, potentially reshaping online shopping behaviors.

Defending Honey

PayPal has defended Honey’s practices, emphasizing the benefits it provides to consumers. However, the company has not directly addressed many of the specific allegations raised by critics.

Influencer Response

Some influencers who previously promoted Honey have issued apologies or explanations to their audiences. Others have remained silent, possibly due to legal concerns or ongoing contractual obligations.

PayPal’s Controversial Browser Extension

The controversy has raised awareness among consumers about the potential downsides of “free” browser extensions. Many users are now more cautious about installing such tools and are paying closer attention to how their online shopping habits may be tracked and monetized.

Have You Used Honey from PayPal?

If you’ve used Honey and believe you may have been affected by these practices, consider reaching out to AWKO for a consultation. We’re investigating this issue and are committed to protecting consumer rights and supporting content creators impacted by potentially deceptive business practices.