What is the honey fraud controversy? Browser extension promoted by MrBeast, others accused of ripping off customers | Trending

In a serious allegation, a YouTube creator accused PayPal’s browser extension, Honey, of misleading consumers and influencers alike. In a video titled “Exposing the Honey Influencer Scam,” released Dec. 21, YouTuber MegaLag claims that Honey hijacks affiliate links that pay influencers to promote products, offers limited coupon opportunities, and publishes misleading advertisements. The video, which is part of a three-part series, has amassed over 9.4 million views.

In the video, MegaLag describes what he believes to be a deceptive practice, saying he wouldn’t be surprised if this situation turned out to be one of the “most aggressive, shameless marketing scams of the century.” However, PayPal has responded to these allegations, defending Honey’s business model and denying any fraudulent conduct.

What is honey?

Honey, a browser extension that helps users find and apply coupon codes while shopping online, was acquired by PayPal in 2020 for approximately $4 billion. Originally launched in 2012, Honey claims to help users save money on their online purchases by automatically applying the best available coupons at checkout. After PayPal’s acquisition, the tool has grown significantly, with PayPal launching PayPal Rewards to encourage further use of Honey. Users can earn points when using the extension, which can later be redeemed for cashback, PayPal credits or gift cards.

Take a look at the video:

However, MegaLag criticized this rewards program, calling it a “lame cashback scheme”. He also shared a comparison of his earnings when using his affiliate link versus =PayPal Rewards. MegaLag showed that by using his own affiliate link to purchase a NordVPN subscription worth $95, he earned about $35 in commissions. In contrast, he only paid 89 cents in cashback using PayPal Rewards for the same purchase.

The video also addressed Honey’s alleged limited coupon offer. MegaLag claimed he often found better deals on other coupon sites like RetailMeNot when Honey claimed no coupons were available. PayPal, in response, clarified that the coupons Honey provides are sourced from a mix of merchant partnerships, deal networks and user submissions. Ultimately, PayPal stressed that it is up to merchants to decide which coupons Honey presents to consumers.

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Another point raised by MegaLag concerned Honey’s past advertising practices. He accused Honey of misleading consumers with ads that suggested the platform finds all available coupons online, implying that using Honey would eliminate the need for shoppers to search for discounts themselves. In 2020, the National Advertising Division (NAD) launched an investigation into a honey ad that claimed it could find “every working code on the Internet.” However, after the investigation was opened, Honey informed NAD that it had already stopped showing the advertisement for “business reasons” and agreed to permanently stop running the misleading ads.

Despite these concerns, PayPal maintains that Honey follows industry standards and practices, including “last-click attribution,” a common method used by affiliate marketing programs. Amy Bonitatibus, PayPal’s Chief Corporate Affairs and Communications Officer, defended the tool, stating that Honey is free to use and helps both shoppers save money and sellers increase sales by reducing cart abandonment.

While MegaLag’s video has garnered a lot of attention with millions of views and considerable debate, PayPal has yet to admit any wrongdoing. As the situation develops, it remains to be seen how these allegations will affect Honey’s reputation and its place in the competitive world of online shopping tools.

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