The Hidden Truth About Honey: How the Browser Extension Exploits Consumers, Creators, and Businesses

In the digital age, saving money online has become a priority for consumers worldwide. Enter Honey, the popular browser extension owned by PayPal, which promises to automatically apply the best coupon codes to your online purchases. With glowing endorsements from influencers and millions of users, Honey seems like the perfect tool to save money effortlessly. But behind the enticing promise lies a series of questionable practices that harm consumers, content creators, and businesses alike.

What Is Honey and How Does It Work?

Honey is marketed as a free browser extension designed to save users money by finding and applying coupon codes during online shopping. It boasts millions of users and high-profile partnerships, making it one of the most recognized tools in its category.

However, as uncovered in a recent investigative video, Honey’s operations involve unethical affiliate marketing practices, deceptive advertising, and exploitation of its users’ trust.

The Affiliate Fraud Allegations

At the core of Honey’s business model lies a controversial practice: cookie stuffing. Here’s how it works:

1. Creators Promote Products: Influencers and bloggers share affiliate links, earning commissions when their followers make purchases.

2. Honey Hijacks Commissions: When users activate Honey at checkout, the extension overrides the original affiliate cookie with its own. The commission, instead of going to the creator, is redirected to Honey.

Why This Matters

• For Creators:

Small content creators who depend on affiliate commissions lose revenue. This is particularly damaging for those with limited income streams outside of affiliate marketing.

• For Consumers:

Users are unknowingly complicit in this practice, believing they are saving money while Honey profits at the expense of the creators they trust and support.

Deceptive Advertising: Are You Really Saving Money?

Honey’s promise to find the “best deals” is central to its appeal. But the investigation reveals that this claim is far from accurate.

Partner Stores Control Discounts

• Partner businesses can dictate which coupons Honey applies, often restricting better discounts to protect their profit margins.

• Users are often presented with suboptimal deals, leading them to believe they are saving money when they might have found better discounts manually.

False Claims

• Honey frequently advertises that it scours the internet for all available coupon codes, a claim debunked by its own practices.

• Manual searches often yield better results, exposing the platform’s inefficiencies.

Honey Gold: A Poor Deal for Consumers

Honey offers a cashback program called Honey Gold (now branded as PayPal Rewards). Here’s how it works:

• Users earn points when Honey claims affiliate commissions for purchases.

• These points can be redeemed for minimal cashback, often amounting to pennies compared to the commissions Honey retains.

Case in Point

• A $35 affiliate commission was replaced by Honey’s cookie, and the user was rewarded only $0.89 in cashback points.

• This practice raises questions about fairness and transparency in cashback models.

The Impact on Businesses

While Honey positions itself as a consumer-friendly tool, businesses also bear the brunt of its practices:

• Disruption in Pricing Strategies:

Honey generates fake discount codes, frustrating merchants and disrupting their pricing models.

• Increased Costs:

Merchants often lose revenue due to unauthorized discounts or inflated affiliate fees, leading to price increases for consumers.

PayPal’s Role in Honey’s Practices

In 2020, PayPal acquired Honey for $4 billion, promising greater innovation in e-commerce. However, PayPal’s involvement has amplified Honey’s scale, spreading its controversial practices to millions more users worldwide.

Regulatory Oversight

Despite Honey’s deceptive advertising and affiliate practices, regulatory bodies like the Better Business Bureau (BBB) have yet to enforce meaningful accountability. PayPal’s global influence further complicates efforts to address these concerns.

What This Means for Consumers

Honey’s practices reveal the hidden costs of “free” services. While users may believe they are saving money, they are often participating in a system that:

• Exploits content creators.

• Limits genuine savings by restricting coupon access.

• Uses misleading advertising to foster trust.

How to Protect Yourself

To avoid falling victim to these practices, consider these tips:

1. Manually Search for Coupons:

Avoid relying solely on browser extensions like Honey. Websites like RetailMeNot or SlickDeals offer better transparency.

2. Support Content Creators Directly:

Use affiliate links shared by your favorite creators, bypassing extensions that hijack commissions.

3. Evaluate Cashback Programs:

Compare cashback offers across platforms to ensure you are getting the best deal.

The Larger Implications

Honey’s rise to prominence reflects the broader issues within the affiliate marketing industry, where transparency and fairness often take a backseat to profits. Its practices harm not just users but also the creators and businesses that form the backbone of e-commerce.

What Needs to Change

• Stricter Regulation:

Regulatory bodies must enforce transparency in affiliate marketing and hold platforms accountable for deceptive practices.

• Consumer Awareness:

Educating users about how these platforms operate can drive demand for ethical alternatives.

• Creator Advocacy:

Influencers and bloggers must demand accountability from companies they partner with, ensuring their audiences are not misled.

While Honey may appear to be a consumer-friendly tool, its practices tell a different story. From affiliate fraud to deceptive advertising, the extension’s operations prioritize profits over ethics, leaving consumers, creators, and businesses worse off.

The next time you shop online, think twice before activating Honey. A little manual effort can not only save you more money but also support the creators and businesses you trust.