Honey is a free browser add-on that automatically applies coupon codes when you checkout online. Or so they claim.

The bulk of this article is a summary of the key points made in MegaLab’s recent YouTube video. I’m just here to bring the facts to the table. It should be obvious where I share my own opinion and where I reflect the general sentiment of the internet. This post is, as the title suggests, a TLDR (too long, didn’t read) summary

...

What is Honey?

Honey is a browser extension that automatically applies coupon codes during online checkout. It claims to find the best available codes for you. In practice, it’s incredibly easy to use. When you reach the checkout page on an online store, the Honey icon pops up, searches for any available coupon codes, and applies them with just a single click. There’s no denying that, in theory, it’s a fantastic product.

Honey was founded in 2012 and acquired by PayPal in 2020. Since then, PayPal has aggressively integrated Honey into its services, even rebranding the company to PayPal Honey in 2022. Honey’s primary marketing strategy is influencer marketing. This includes traditional in-content brand deals on YouTube, as well as affiliate marketing across YouTube, online blogs, and other platforms. Some of the largest YouTube creators, such as MrBeast, MKBHD, and Linus Tech Tips, have been sponsored by Honey.

It has recently come to light, especially after MegaLab’s YouTube video, that Honey has been dishonest, bordering on fraud, against both its customers and creator partners.

Hijacking affiliate codes

When you click on a creator’s affiliate link for a product, your browser stores their affiliate code as a cookie. If you complete a purchase within a certain time frame, the store checks for the presence of the affiliate cookie at checkout. If one is found, the creator is credited with a commission on the sale. This commission typically ranges from 5% to 30% and is often a crucial revenue source for creators, especially smaller ones.

What Honey was found to be doing was hijacking the affiliate cookie. Essentially, if you used the Honey browser extension at checkout (to search for coupon codes), regardless of whether it found a code or not, it would delete the creator’s affiliate cookie and replace it with its own. As a result, after checkout, Honey would receive the commission for the sale, even though you were originally referred by a creator. It is estimated that Honey has stolen hundreds of millions of dollars worth of affiliate revenue from creators using this method.

Serving the store, not the consumer

At face value, Honey seems like a product that's on your side. It helps you save money by finding coupon codes, working in your favour against the store. However, Honey’s partnership programme (the partnership between Honey and the store) allows stores to control the maximum discount Honey can apply at checkout. For example, a contract between Honey and Store X might state that Honey can only apply a maximum 5% discount, even though larger coupons may be available with a simple online search.

Hence, if you trust Honey, you’re under the false illusion that you’re getting a good deal (with the 5% off), while the store still maximises its revenue since you don’t get a bigger discount. And the benefit for Honey? They earn a small commission from the sale. It’s like an under-the-table agreement between Honey and the store, working together to give you the illusion of winning, even though you’re the one taken advantage of.

Conclusion

While I’ve massively oversimplified the problem and left out many nuances (for example, Honey stealing affiliate referral revenue even when they themselves admit they don’t have a coupon code), I’ve aimed to show both sides of the coin. Consumers are getting scammed through deals between Honey and the stores, while creators are being robbed of their affiliate commissions. MegaLab’s video goes into all the details, providing more proof and data on the situation. I highly recommend you watch it to fully understand the extent of the scam.