YouTube Creator Denounces PayPal Browser Extension Honey as a Scam

Everyone loves to save money when buying stuff—even more so when free apps do all the legwork and find the best online deals available. Nobody, however, likes to learn that a digital helper cutting purchase prices by a buck or two with one hand has been lifting even larger sums from their pockets with the other. And it’s that kind of double-dealing that a prominent YouTube creator alleges PayPal’s browser extension, Honey, has been doing for years.

Honey became popular with millions of digital shoppers by offering them ways to save money as they prepare to pay for items—all free of charge. The app and browser extension does that by rifling some 30,000 retail sites it’s connected to for coupon codes, and then reporting any it finds to enable savings on pending purchases. In cases when it comes up with no valid discount opportunities, it often proposes cashback rewards to users who complete transactions.

The PayPal-owned utility has become a favorite among online content creators and influencers—some of whom promote Honey under paid agreements with the company. Those include high profile names like Mr. Beast, MKBHD, and the person behind Linus Tech Tips, who have all championed the savings it provides users.

So what’s the problem with that? According to New Zealand-based YouTube video producer and tech investigator MegaLag, “Honey is a scam … [and] might be the biggest influencer scam of all time.”

The accusation is based on what MegaLag said was a “multi-year investigation” that left him convinced Honey was costing most of the people it works with untold millions of dollars. That includes influencers who promote the app and people or companies using affiliate links to earn commissions on purchases made through them.

The video says even consumers aren’t getting the sweet deals they imagine, with Honey often showing them discounts from partnering merchants, not the biggest write-downs and lowest prices available elsewhere.

“Honey hasn’t just been scamming you, the consumer,” MegaLag said in a 23-minute video that has been viewed 6.8 million times in two days. “It’s also been stealing money from influencers, including the very ones they paid to promote their product. … I believe the scam has likely cost content creators millions of dollars.”

In making that case, MegaLag demonstrates how Honey appears to use digital sleights of hand to steal credit for online buying that should have been attributed to online personalities’ affiliate links—or to nobody at all.

Central to that, the Kiwi investigator said, was Honey thrusting itself into the final step of the transaction process. It allegedly does so by getting consumers to click on a coupon code or some other prompt—including a “buy with PayPal” option that already exists on the merchant’s page. Getting that reaction to its popup windows is vital to fulfilling the “last click” online business rule determining to whom referral commissions for sales are attributed.

MegaLag’s video shows that, when shoppers click one of those buttons, Honey appears to replace the codes of referring influencers or content creators with the app’s own identifier. In cases when it finds no coupons to propose consumers, Honey may offer cashback rewards obtained by pressing a different digital prompt.

Using one of his own online purchases to see how that method broke down, MegaLag found Honey secured itself over $35 in commissions for a purchase it had no role in, while paying out just 89 cents worth of cashback points as bait.

That kind of income generation might explain why PayPal decided to buy Honey for about $4 billion in 2020, nearly eight years after its launch. Today the app says it has 17 million users, who it claims save an average $126 per year using coupon discounts of nearly 18 percent per purchase.

In response to MegaLag’s accusations, PayPal vice president of corporate communications Josh Criscoe told the tech news site The Verge that Honey offers a valuable service, and operates according to online standards.

“Honey follows industry rules and practices, including last-click attribution,” Criscoe told the site. “Honey is free to use and provides millions of shoppers with additional savings on their purchases whenever possible. Honey helps merchants reduce cart abandonment and comparison shopping while increasing sales conversion.”

MegaLag insists Honey’s real value is created in more underhanded ways. He also notes many of its big-name influencer promoters dumped the app cold once they realized they’d been burned—and thinks wised up consumers and merchants may follow suit.

“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,” he says in the video, adding the broader warning tech experts have expressed about all apps that seem too good to be true. “You know what they say—if you’re not paying for the product, it’s likely you are the product.”

That’s probably an all-too-true observation in general. But ironically, it’s particularly applicable to the online influencers the YouTuber says are being hoodwinked by the freebie app.