Coupon finder accused of ‘exploiting’ influencers

On By Littum

A popular YouTuber accused Internet browser extension Honey, known for finding coupons, of “exploiting” last-click attribution. Here’s what that means.

game

  • Honey is an internet browser extension that advertises finding and applying coupon codes for online shoppers.
  • PayPal bought Honey in 2020 for $4 billion.
  • YouTube tech journalist MegaLag posted a video on December 21 accusing Honey of scamming influencers.
  • MegaLag accused Honey of breaking the content creator’s affiliate links, providing limited coupon codes and publishing dishonest advertisements.

A YouTube creator accuses PayPal of fraudulent behavior linked to the Internet browser extension Honeywhich advertises finding and applying coupon codes for online shoppers.

YouTube creator MegaLag posted a video titled, “Honey Influencer Scam Exposed” on Dec. 21 accused Honey, which is owned by PayPal, of defrauding consumers and influencers by hijacking links that pay influencers for products they promote, providing limited coupon options and serving inaccurate ads.

The 23 minutes videothe first in a three-part series, according to MegaLag, had more than 9.4 million views as of Thursday morning. The video ends with what appears to be a tease for a follow-up.

“I wouldn’t be surprised if this ends up going down as one of the most aggressive, shameless marketing scams of the century,” MegaLag said in video.

In response to the video, PayPal’s Chief Corporate Affairs and Communications Officer Amy Bonitatibus gave USA TODAY the following response:

“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. Honey follows industry regulations and practices, including last -click attribution.”

MegaLag declined to comment when contacted by USA TODAY.

Here’s what you need to know about the MegaLag allegations and where they line up with industry standards.

What is honey?

Honey is a free browser extension that claims to find coupon codes during online shopping.

Honey was released in 2012 and PayPal bought it in 2020 for approximately $4 billion, according to a PayPal News Release.

When PayPal bought Honey, PayPal News Release said the shopping tool served about 17 million monthly active users and helped consumers save about $1 billion annually.

After purchasing Honey, PayPal launched PayPal Rewards, which encourages the use of the Honey extension. PayPal users earn points when they use the browser extension, even if they don’t redeem any coupons, according to Honey website. These points can be used to redeem cash back, PayPal shopping credit or gift cards.

In the video, MegaLag called this rewards program a “lame cashback scheme.”

The creator went on to give an example of how much money he earned through an affiliate link versus PayPal Rewards cashback when making the same purchase. MegaLag provided an example completed through Honey Gold, Honey’s previous rewards program used before PayPal bought it.

When he bought a standard NordVPN package (about $95) through his own affiliate link, MegaLag reported making about $35 from the sale. When MegaLag purchased the same package but activated PayPal Rewards instead of using his affiliate link, MegaLag reported earning about 89 cents in cashback.

Not the first creator to speak out

In the video, MegaLag mentions that after doing research on honey, there was virtually no other information on the subject.

But since the video has gained traction, a clip of YouTube creator Markipiler talking about Honey during a Twitch stream in 2020 has resurfaced.

Mark Fischbach (the creator behind Markipiler) didn’t go into detail, but he did express his “mistrust” of the shopping tool.

“I think they even offered me (a brand deal) and I said no because I just don’t trust Honey,” Fischbach said during current. “I have a feeling in a few years there will be the big Honey conspiracy in 2022.”

The day after MegaLag’s video was posted, Fischbach reposted his stream clip to X with the comment, “I KNEW IT!!!”

Are you breaking affiliate links or last-click attribution?

In the video, “Uncovering the Honey Influencer Scam,” MegaLag accuses Honey of breaking affiliate links.

MegaLag creates the following example: If a consumer clicks on an affiliate link in the description of a YouTube video, the consumer will be taken to the corresponding website. Without using Honey, if the consumer makes a purchase from this link, the YouTube creator will earn a commission.

When thinking in real world scenarios, an affiliate link is similar to a salesperson helping a customer in a store. For example, if a department store salesperson helps a customer find and buy a piece of jewelry, the salesperson earns a commission.

If a consumer has the Honey browser extension installed and accepts a Honey pop-up—whether it’s a coupon offered by the shopping tool or simply a message indicating that Honey found no coupons—Honey will earn a commission from the online purchase . The YouTube creator whose affiliate link the consumer originally followed will not receive a commission.

This model is called last-click attribution, which gives credit to the last touchpoint a user interacts with before making a purchase. While there are other types of attribution — such as first-click, which gives a commission to the first touchpoint interacted with — last-click is considered the industry standard.

In it videoMegaLag claims that Honey “exploits” last-click attribution. When it comes to content creator versus content creator, MegaLag says last-click attribution is usually fair, but when it’s content creator versus Honey, “there’s no real competition.”

“Honey shows up right at the end of your buying journey, almost guaranteeing they win the last click,” says MegaLag in video. “Of course they know that and do everything they can to get that last click. Even where there are no coupon codes to offer.”

Another industry standard when it comes to affiliate marketing is stand-down policy. This policy, implemented by host websites, in this case a reseller, requests that browser extensions respect affiliate marketing. If a retailer employs a stand-down policy, extensions like Honey cannot claim credit even if they are the final touchpoint, according to Wildfirea fintech company offering white-label cashback services.

In response to the MegaLag video, YouTube creator Hank Green released a video, “The Honey Scam and the Ridiculous Mess of Affiliate Marketing” on December 25. In his video, Green discussed how affiliate marketing works in the “small business ecosystem.”

Green said the ecosystem of small businesses looking to make money and be attracted to affiliate marketing is “ripe for exploitation.”

“How responsible should creators be for understanding the business models of the companies they’re doing trademark deals for?” Green posed in his video. “I’m sure a lot of creators aren’t really savvy enough or have the time to do that work. The brand deal ecosystem is there, for most creators, where most of the money comes from, so it can be really hard to say no, and it can be really easy to try not to think too much about how things work.”

Ultimately, like MegaLag, Green argued that Honey and PayPal take advantage of content creators.

USA TODAY reached out to experts to get more context on industry best practices.

Where does honey get coupons from?

MegaLag also accused Honey of offering limited coupon codes and not giving customers all the best options.

In it videoMegaLag said he was often able to find redeemable coupon codes from other shopping tools like RetailMeNot when Honey indicated no coupons could be found.

PayPal’s Bonitatibus told USA TODAY that merchants ultimately decide which coupons are offered to consumers through Honey.

When it comes to sourcing its coupons, Bonitatibus said they are manually collected by Honey’s team, sourced from deal networks, made available through merchant partnerships and sourced from users who share codes with Honey.

Past advertising issues

In it videoMegaLag also accused Honey of publishing dishonest advertisements that claim the shopping tool searches for all available coupon codes, implying that a customer using Honey does not need to search for their own coupons.

In 2020, the National Advertising Division opened an investigation into a Honey ad that claimed, “With just one click, Honey will find every working code on the Internet and apply the best one to your cart,” according to a BBB National Program News Release.

However, Honey informed the National Advertising Division after the investigation was opened that it had been discontinuing the ad for “business reasons”, according to a BBB National Program News Release. Honey also agreed to permanently halt the related ads. The National Advertising Department’s investigation was thus concluded.

Who is MegaLag?

MegaLag is a New Zealand YouTube creator who had 508,000 subscribers as of Monday afternoon. Self-identified as a tech investigative journalist, the creator, who confirmed to USA TODAY that his first name is Jonathon, is known for his videos that “expose” companies or experiment with other technology.

Editor’s note: This story was updated to correct the name of an organization.

Greta Cross is a national trends reporter at USA TODAY. Follow her on X and Instagram @gretalcross. Story idea? Email her at [email protected].