PayPal Honey: Difference between revisions
Updated meta description. |
Edited section re: December 2024 controversy--added important details of original MegaLag investigation that revealed Honey's affiliate poaching practices, including a section on a test they performed demonstrating that they received a commission when not using Honey and did not receive a commission when activating Honey. |
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==Incidents== | ==Incidents== | ||
=== Affiliate-tampering controversy (''Dec. 2024'') === | |||
==== MegaLag Investigation (''Dec. 2024)'' ==== | |||
On December 21 2024, the tech-related YouTube channel MegaLag posted a video titled "Exposing the Honey Influencer Scam," in which they alleged that Honey was engaging in systematic manipulation of affiliate marketing links through a process known as "cookie stuffing."<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> Through this type of "affiliate poaching," Honey was alleged to have removed the original content creator's affiliate cookie, which tracked that the content creator was responsible for the sale so they could receive a later commission, and instead injected Honey's own affiliate cookie without the user's knowledge. Through this process, Honey effectively claimed the commission for the sale that would have gone to the content creator who originally guided the user to the product. Honey did this even when it explicitly offered no discount or coupon codes to the purchaser. | |||
In short, the investigation found that when users clicked on a content creator's affiliate link and subsequently activated Honey during checkout, Honey would: | |||
In | |||
*Delete the original affiliate's tracking cookie | *Delete the original affiliate's tracking cookie | ||
*Replace it with Honey's own affiliate cookie via a hidden redirect tab | *Replace it with Honey's own affiliate cookie via a hidden redirect tab that closed within a few seconds | ||
*Claim the commission that was intended for the original content creator | *Claim the commission that was intended for the original content creator | ||
The video presented several scenarios in which this "affiliate poaching" would occur, even when Honey offered no discounts or coupons to the user, namely: | |||
Additionally, contrary to marketing claims about finding "the best deals" | * Upon the user clicking "Activate Rewards" when presented with a Honey pop-up indicating to do so. | ||
* Upon the user clicking "Got It" to acknowledge and discard a Honey pop-up stating, "We searched for you but didn't find any deals." | |||
* Upon clicking "PayPal" when presented with a Honey pop-up recommending the user check out via PayPal, which owns Honey, even when the option was already present on the native website and would have preserved the original content creator's affiliate cookie and commission if the user had done so through that website and not Honey's pop-up. | |||
===== Affiliate test ===== | |||
Part of the investigative piece included a section in which MegaLag tested what would happen to their own commission when purchasing a product with Honey and without Honey. They signed up for an affiliate program through a popular VPN provider and then made two distinct purchases. One purchase was made using the Honey browser extension, and the other without using the extension. They made each purchase using a VPN server in different countries (one in the USA and one in the Netherlands), and used "separate, new browser sessions with cookies cleared."<ref>{{Cite web |first=MegaLag |date=21 Dec 2025 |title=Exposing the Honey Influencer Scam |url=https://www.youtube.com/watch?v=vc4yL3YTwWk |url-status=live |access-date=08 Jan 2026 |website=YouTube.com |at=11:03-11:07}}</ref> They also signed up for Honey's rewards program to test how much of the commission would be shared with a consumer. | |||
They found that when purchased without the use of Honey, they received a $36.50 commission for the sale as expected. However, when purchasing the product with the use of Honey, MegaLag received no commission and the commission was instead redirected to Honey. MegaLag also demonstrated that of the $35.60 commission poached by Honey, only $0.89 was shared with the purchaser via the rewards program. | |||
==== Misleading consumers ==== | |||
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" /> | 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" /> | ||
===Content-creator lawsuits (''Dec. 2024'')=== | |||
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" /> | |||
<p>Gamers Nexus, LLC later filed a class-action lawsuit against PayPal in January 2025 citing the same grievances.<ref name="gamersnexus-v-paypal-holdings" /> | |||
===Significant changes | ===Significant changes to the Terms of Service (''Oct. 2024 - Dec. 2024'')=== | ||
Several parts of the Terms of service were updated and added, such as | Several parts of the Terms of service were updated and added, such as | ||
| Line 60: | Line 74: | ||
*a number of small changes between the lines. | *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, | Also noteworthy is that on January 8 2025 older versions of the TOS were available on archive.org. However, as of January 28, 2025, the archive shows 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 available prior to January 25 2025 dating back to 2022</ref> | ||
To prevent loss of those details: | To prevent loss of those details: | ||
Revision as of 07:11, 9 January 2026
| Basic Information | |
|---|---|
| Release Year | 2012 |
| Product Type | Browser extension |
| In Production | Yes |
| Official Website | https://www.joinhoney.com |
Honey (now PayPal Honey) is a browser extension and platform owned by PayPal since its acquisition for $4 billion in 2020.[1] 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.[2]
Consumer impact summary
Privacy
- Collects extensive personal identifiers including name, email, IP address, and device IDs.[3]
- Retains data for up to 10 years after account closure.[3]
- Shares data with PayPal companies and merchant partners.[3]
- Tracks detailed shopping behavior, including purchases, returns, and browsing patterns.[3]
- Creates inference profiles based on shopping patterns and preferences.[3]
Freedom
- Consumer choice restricted by intentionally hidden discounts and deals.[4][5]
- Mandatory acceptance of arbitration clause with class action waiver.[6]
- No user control over partner-privileged discount system.[4][5]
- Service can be terminated at PayPal's discretion without notice.[6]
- Users forced to accept terms modifications without direct notification.[6]
- Transparency
Business model
Market control
Incidents
Affiliate-tampering controversy (Dec. 2024)
MegaLag Investigation (Dec. 2024)
On December 21 2024, the tech-related YouTube channel MegaLag posted a video titled "Exposing the Honey Influencer Scam," in which they alleged that Honey was engaging in systematic manipulation of affiliate marketing links through a process known as "cookie stuffing."[9] Through this type of "affiliate poaching," Honey was alleged to have removed the original content creator's affiliate cookie, which tracked that the content creator was responsible for the sale so they could receive a later commission, and instead injected Honey's own affiliate cookie without the user's knowledge. Through this process, Honey effectively claimed the commission for the sale that would have gone to the content creator who originally guided the user to the product. Honey did this even when it explicitly offered no discount or coupon codes to the purchaser.
In short, the investigation found that when users clicked on a content creator's affiliate link and subsequently activated Honey during checkout, Honey would:
- Delete the original affiliate's tracking cookie
- Replace it with Honey's own affiliate cookie via a hidden redirect tab that closed within a few seconds
- Claim the commission that was intended for the original content creator
The video presented several scenarios in which this "affiliate poaching" would occur, even when Honey offered no discounts or coupons to the user, namely:
- Upon the user clicking "Activate Rewards" when presented with a Honey pop-up indicating to do so.
- Upon the user clicking "Got It" to acknowledge and discard a Honey pop-up stating, "We searched for you but didn't find any deals."
- Upon clicking "PayPal" when presented with a Honey pop-up recommending the user check out via PayPal, which owns Honey, even when the option was already present on the native website and would have preserved the original content creator's affiliate cookie and commission if the user had done so through that website and not Honey's pop-up.
Affiliate test
Part of the investigative piece included a section in which MegaLag tested what would happen to their own commission when purchasing a product with Honey and without Honey. They signed up for an affiliate program through a popular VPN provider and then made two distinct purchases. One purchase was made using the Honey browser extension, and the other without using the extension. They made each purchase using a VPN server in different countries (one in the USA and one in the Netherlands), and used "separate, new browser sessions with cookies cleared."[10] They also signed up for Honey's rewards program to test how much of the commission would be shared with a consumer.
They found that when purchased without the use of Honey, they received a $36.50 commission for the sale as expected. However, when purchasing the product with the use of Honey, MegaLag received no commission and the commission was instead redirected to Honey. MegaLag also demonstrated that of the $35.60 commission poached by Honey, only $0.89 was shared with the purchaser via the rewards program.
Misleading consumers
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."[4]
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."[5]
Content-creator lawsuits (Dec. 2024)
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.[7]
Gamers Nexus, LLC later filed a class-action lawsuit against PayPal in January 2025 citing the same grievances.[8]
Significant changes to the Terms of Service (Oct. 2024 - Dec. 2024)
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. However, as of January 28, 2025, the archive shows a "Failed to Fetch" error.[11]
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[6] (checked on 5 February 2025) shows "Last updated January 16, 2024"
References
- ↑ Perez, Sarah (November 20, 2019). "PayPal to acquire shopping and rewards platform Honey for $4B". TechCrunch. Retrieved January 15, 2025.
- ↑ Metcalf, Tom; Verhage, Julie (January 28, 2020). "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.
- ↑ 3.0 3.1 3.2 3.3 3.4 "PayPal Honey Privacy Statement". PayPal Honey. October 28, 2024. Retrieved January 15, 2025.
- ↑ 4.0 4.1 4.2 4.3 4.4 4.5 MegaLag (December 21, 2024). "Exposing the Honey Influencer Scam". YouTube. Retrieved January 15, 2025.
- ↑ 5.0 5.1 5.2 5.3 5.4 5.5 Fernandez, Ray (December 24, 2024). "Is PayPal's Honey Misleading Users? We Investigate". Techopedia. Retrieved January 15, 2025.
- ↑ 6.0 6.1 6.2 6.3 "Terms of Use". PayPal Honey. January 16, 2024. Retrieved February 5, 2025.
- ↑ 7.0 7.1 "Wendover Productions, LLC v. PayPal Inc, 5:24-cv-09470, (N.D. Cal.)". courtlistener.com. Free Law Project. Retrieved January 15, 2025.
- ↑ 8.0 8.1 "GamersNexus, LLC v. PayPal Holdings, Inc., 5:25-cv-00114, (N.D. Cal.)". courtlistener.com. Free Law Project. Retrieved January 15, 2025.
- ↑ "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.
- ↑ "Exposing the Honey Influencer Scam". YouTube.com. 21 Dec 2025. 11:03-11:07. Retrieved 08 Jan 2026.
{{cite web}}:|first=missing|last=(help); Check date values in:|access-date=(help)CS1 maint: url-status (link) - ↑ "Archived versions of joinhoney.com on archive.org" a fully functional archive of multiple versions were available prior to January 25 2025 dating back to 2022