Consumer_Action_Taskforce

PayPal Honey: Difference between revisions

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[[File:Honey Logo.png|thumb|The textmark for Honey by PayPal, formerly "Honey"]]
{{ProductPage
Honey (now PayPal Honey) is a browser extension and platform owned by PayPal Holdings, Inc. since its acquisition for $4 billion in 2020.<ref>Perez, Sarah (November 20, 2019). [https://techcrunch.com/2019/11/20/paypal-to-acquire-shopping-and-rewards-platform-honey-for-4-billion/ "PayPal to acquire shopping and rewards platform Honey for $4B"]. ''TechCrunch''. Retrieved January 15, 2025.</ref> The service, launched in 2012, is primarily known for its browser extension that automatically searches for and applies discount codes during online shopping checkout processes. The company is headquartered in Los Angeles, California.<ref>Metcalf, Tom; Verhage, Julie (January 28, 2020). [https://web.archive.org/web/20201209044201/https://www.bloombergquint.com/onweb/coupon-duo-now-worth-1-5-billion-after-honey-s-sale-to-paypal "Coupon Duo Now Worth $1.5 Billion After Honey's Sale to PayPal"]. ''BloombergQuint''. Archived from the original on December 9, 2020. Retrieved January 15, 2025.</ref>
|infobox_logo=PayPal_Honey.svg


== Consumer Protection Profile ==
|infobox_1_key=Release Year
==== CAT Rating: 1/3 ====
|infobox_1_value=2012


Honey's approach to consumer protection has faced significant scrutiny, particularly regarding its data collection practices and business model. The company's operations have raised concerns in three main areas:
|infobox_2_key=Product Type
# Treatment of consumer data and privacy
|infobox_2_value=Browser Extension
# Transparency about coupon-finding methodology
# Impact on affiliate marketing ecosystem


== Consumer Protection Incidents ==
|infobox_3_key=In Production
|infobox_3_value=Yes


=== Coupon Database Controversy (Dec. 2024) ===
|infobox_4_key=Official Website
Investigations revealed that contrary to marketing claims of "searching the internet" for coupons, Honey primarily searches its own internal database. This has led to questions about the accuracy of its marketing claims and the comprehensiveness of its coupon-finding service.<ref>Fernandez, Ray (December 24, 2024). [https://www.techopedia.com/paypal-honey-accused-of-fraud "Is PayPal's Honey Misleading Users? We Investigate"]. ''Techopedia''. Retrieved January 15, 2025.</ref><ref>MegaLag (December 21, 2024). [https://www.youtube.com/watch?v=vc4yL3YTwWk "Exposing the Honey Influencer Scam"]. ''YouTube''. Retrieved January 15, 2025.</ref>
|infobox_4_value=https://www.joinhoney.com


=== Affiliate Link Manipulation Lawsuit (Jan. 2025) ===
|description='''Honey''' (now '''PayPal Honey''') is a browser extension and platform owned by [[PayPal]] since its acquisition for $4 billion in 2020.<ref>Perez, Sarah (November 20, 2019). [https://techcrunch.com/2019/11/20/paypal-to-acquire-shopping-and-rewards-platform-honey-for-4-billion/ "PayPal to acquire shopping and rewards platform Honey for $4B"]. ''TechCrunch''. Retrieved January 15, 2025.</ref> The service, launched in 2012, is primarily known for its browser extension that automatically searches for and applies discount codes during online shopping checkout processes. The company is headquartered in Los Angeles, California.<ref>Metcalf, Tom; Verhage, Julie (January 28, 2020). [https://web.archive.org/web/20201209044201/https://www.bloombergquint.com/onweb/coupon-duo-now-worth-1-5-billion-after-honey-s-sale-to-paypal "Coupon Duo Now Worth $1.5 Billion After Honey's Sale to PayPal"]. ''BloombergQuint''. Archived from the original on December 9, 2020. Retrieved January 15, 2025.</ref>
A class action lawsuit was filed in January 2025 alleging that Honey manipulated affiliate marketing links without proper disclosure or compensation. The suit claims Honey replaced legitimate affiliate links with their own, even when no coupons were found for users. This practice allegedly impacted both content creators and consumers who intended to support specific affiliates.<ref>[https://www.courtlistener.com/docket/69503243/9/wendover-productions-llc-v-paypal-inc/ "Wendover Productions, LLC v. PayPal Inc"]. ''courtlistener.com''. Free Law Project. Retrieved January 15, 2025.</ref>


== Consumer Rights Policies ==
|summary_privacy_1=Collects extensive personal identifiers including name, email, IP address, and device IDs.<ref name="privacy-policy">[https://www.joinhoney.com/privacy "PayPal Honey Privacy Statement"]. ''PayPal Honey''. October 28, 2024. Retrieved January 15, 2025.</ref>
|summary_privacy_2=Retains data for up to 10 years after account closure.<ref name="privacy-policy"/>
|summary_privacy_3=Shares data with PayPal companies and merchant partners.<ref name="privacy-policy"/>
|summary_privacy_4=Tracks detailed shopping behavior, including purchases, returns, and browsing patterns.<ref name="privacy-policy"/>
|summary_privacy_5=Creates inference profiles based on shopping patterns and preferences.<ref name="privacy-policy"/>


=== Data Collection and Privacy ===
|summary_freedom_1=Consumer choice restricted by intentionally hidden discounts and deals.<ref name="megalag-video"/><ref name="techopedia-article"/>
Honey collects and shares the following data:<ref>[https://www.joinhoney.com/privacy "PayPal Honey Privacy Statement"]. October 28, 2024. ''PayPal Honey''. Retrieved January 15, 2025.</ref>
|summary_freedom_2=Mandatory acceptance of arbitration clause with class action waiver.<ref name="terms-of-use">[https://www.joinhoney.com/terms "Terms of Use"]. ''PayPal Honey''. January 16, 2024. Retrieved February 5, 2025.</ref>
* Browsing data related to shopping activities
|summary_freedom_3=No user control over partner-privileged discount system.<ref name="megalag-video"/><ref name="techopedia-article"/>
* User interactions with retail websites
|summary_freedom_4=Service can be terminated at PayPal's discretion without notice.<ref name="terms-of-use"/>
|summary_freedom_5=Users forced to accept terms modifications without direct notification.<ref name="terms-of-use"/>


=== Terms of Service ===
|summary_transparency_1=Undisclosed manipulation of affiliate marketing links.<ref name="megalag-video">MegaLag (December 21, 2024). [https://www.youtube.com/watch?v=vc4yL3YTwWk "Exposing the Honey Influencer Scam"]. ''YouTube''. Retrieved January 15, 2025.</ref><ref name="techopedia-article">Fernandez, Ray (December 24, 2024). [https://www.techopedia.com/paypal-honey-accused-of-fraud "Is PayPal's Honey Misleading Users? We Investigate"]. ''Techopedia''. Retrieved January 15, 2025.</ref>
The mandatory terms of service include:<ref>[https://www.joinhoney.com/terms "Terms of Use"]. January 16, 2024. ''PayPal Honey''. Retrieved January 15, 2025.</ref>
|summary_transparency_2=Hidden redirect mechanisms affecting commissions.<ref name="megalag-video"/><ref name="techopedia-article"/>
* Users must submit to data collection practices
|summary_transparency_3=Selective display of coupon codes based on undisclosed partner agreements.<ref name="megalag-video"/><ref name="techopedia-article"/>
* The service can be terminated at PayPal's discretion
|summary_transparency_4=Subject to multiple ongoing class action lawsuits regarding alleged deceptive practices.<ref name="wendover-v-paypal">[https://www.courtlistener.com/docket/69503243/9/wendover-productions-llc-v-paypal-inc/ "Wendover Productions, LLC v. PayPal Inc, 5:24-cv-09470, (N.D. Cal.)"]. ''courtlistener.com''. Free Law Project. Retrieved January 15, 2025.</ref><ref name="gamersnexus-v-paypal-holdings">[https://www.courtlistener.com/docket/69517397/gamersnexus-llc-v-paypal-holdings-inc/ "GamersNexus, LLC v. PayPal Holdings, Inc., 5:25-cv-00114, (N.D. Cal.)"]. ''courtlistener.com''. Free Law Project. Retrieved January 15, 2025.</ref>
* Changes to terms can be made without direct notification


== References ==
|incidents_1_title=Content-creator lawsuits
<references />
|incidents_1_date=Dec. 2024
|incidents_1_text=In December 2024, a [[class-action lawsuit]] was filed against PayPal by [[Wendover Productions, LLC]] alleging that Honey manipulated affiliate marketing links without proper disclosure or compensation. The suits claim Honey replaced legitimate affiliate links with their own, even when no coupons were found for users. This practice allegedly impacted both content creators and consumers who intended to support specific affiliates.<ref name="wendover-v-paypal"/>


== See Also ==
<p>[[Gamers Nexus, LLC]] later filed a class-action lawsuit against PayPal in January 2025 highlighting the same issues.<ref name="gamersnexus-v-paypal-holdings"/>
[[PayPal Holdings, Inc.]]


[[CapitalOne Affiliate Lawsuit]]
|incidents_2_title=Affiliate-tampering controversy
|incidents_2_date=Dec. 2024
|incidents_2_text=In December 2024, investigations revealed that Honey was engaging in systematic manipulation of affiliate-marketing links. The investigations found that when users clicked on content creators' affiliate links and subsequently used Honey during checkout, the extension would:


[[Affiliate Marketing]]
* Delete the original affiliate's tracking cookie
* Replace it with Honey's own affiliate cookie via a hidden redirect tab
* Claim the commission that was intended for the original content creator
 
This practice is an example of "cookie stuffing," where an affiliate injects their own affiliate cookie without the user's knowledge.<ref>[https://www.justice.gov/usao-ndca/pr/laguna-niguel-man-receives-fifteen-month-prison-term-defrauding-ebay "Laguna Niguel Man Receives Fifteen-Month Prison Term For Defrauding eBay"] ''U.S. Attorney's Office, Northern District of California''. August 4, 2014. Retrieved January 18, 2025.</ref>
 
Additionally, contrary to marketing claims about finding "the best deals", Honey was found to have agreements with partner stores allowing them to control which coupon codes appeared through the extension. This meant stores could hide better discounts while only showing Honey users lower-value coupons. The practice directly contradicted years of marketing claims that promised users they would "always get the best deal possible."<ref name="megalag-video"/>
 
Simon Wijckmans, CEO of c/side, noted that "When users purchased via an affiliate link with Honey installed, commissions intended for creators were redirected to Honey. Additionally, Honey misrepresented deals as the best discounts while partnering with companies to hide better offers."<ref name="techopedia-article"/>
 
|incidents_3_title=Significant changes on the Terms of Service
|incidents_3_date=Oct. 2024 - Dec. 2024
|incidents_3_text=Several parts of the Terms of service were updated and added, such as
 
* Change of the Governing Law from England and Wales to California in the United States
* Addition of a Arbitration.
* a number of small changes between the lines.
 
Also noteworthy is that on January 8 2025 older versions of the TOS were available on archive.org, today (Jan 28 2025) the archive will show a "Failed to Fetch" error.<ref>[https://web.archive.org/web/20220000000000*/https://www.joinhoney.com/terms "Archived versions of joinhoney.com on archive.org"] a fully functional archive of multiple versions were avaiable prior to January 25 2025 dating back to 2022</ref>
 
To prevent loss of those details:
* copy of [[Paypal Honey Terms of Services from December 2024]]
* copy of [[Paypal Honey Terms of Services from January 2025]]
 
''on a more funny note, the current live version of the TOS<ref name="terms-of-use"/> (checked on 5 February 2025) shows "Last updated January 16, 2024"''
 
}}
[[Category:PayPal]]
Retrieved from "https://consumerrights.wiki/wiki/PayPal_Honey"