Honey, a popular browser extension owned by PayPal, is the target of one YouTuber's investigation that was widely shared over the weekend—over 6 million views in just two days. The 23-minute exposé posted to YouTube accuses Honey of misrepresenting itself to consumers, ripping off influencers, and engaging in questionable practices like opening hidden tabs to simulate referral links, ensuring commission on any online sale.
The video was posted by MegaLag, a content creator from New Zealand who creates investigative videos about technology; he’s previously posted investigations into EnChroma, the glasses built for color-blind folks, and DHL.
Jimmy “MrBeast” Donaldson, Marques “MKBHD” Brownlee, and Linus Sebastian of Linus Tech Tips, three popular YouTubers who have previously promoted Honey in their own videos, did not immediately respond to Fortune’s request for comment. MegaLag also did not immediately respond. A spokesperson for PayPal Honey provided the following statement:
“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 rules and practices, including last-click attribution.”
For some background: Honey was founded in November 2012 by a pair of entrepreneurs, Ryan Hudson and George Ruan. After a bug tester leaked the tool to Reddit, the browser extension went viral; it had nearly a million organic users by March 2014. PayPal acquired Honey for about $4 billion in 2020.
Honey, for its part, says it makes money off commissions when a user makes a transaction with one of its retail partners. Part of that commission gets shared with the customer through a cash-back program.
According to MegaLag’s video, though, Honey also engages in deceptive and misleading business practices that hurt consumers, affiliates, and businesses.
“Honey hasn’t just been scamming you, the consumer; they’ve also been stealing money from influencers, including the very ones they paid to promote their product,” MegaLag said in the video.
According to MegaLag, Honey will prioritize coupon codes from its partnering stores, even if there are better discounts elsewhere, meaning it intentionally hides discounts of higher values. Furthermore, MegaLag claims Honey overrides affiliate links from influencers, replacing them with its own, to claim commission on sales.
“PayPal didn’t refer the customer to the store. They didn’t promote any of the products. The influencer did that,” MegaLag said. “PayPal provided absolutely zero value to the customer, yet they were rewarded for the sale.”
Linus Tech Tips, a popular YouTube channel about consumer technology, had promoted Honey extensively through more than 160 videos totaling nearly 200 million combined views. But once it was made aware of the browser extension replacing its affiliate links, it ended its partnership. It did not, however, publicize the issue, instead relaying its concerns to the broader creator community.
“Imagine being the influencers who promoted Honey, telling your audience—who, by the way, are the most likely to use your affiliate links—to download an app that poaches your affiliate sales. It’s crazy,” MegaLag said.
On top of taking affiliate-link revenue from influencers and not showing consumers the best discounts, the MegaLag says Honey has hurt businesses with unauthorized codes, which leads to merchants reporting losses from invalid or excessive discounts. This, oftentimes, leads to price increases in order to offset the loss in revenue.
“Honey is helping businesses prevent consumers from finding the best deals while pretending to do the opposite,” MegaLag said.
According to MegaLag, Honey has sponsored around 5,000 YouTube videos across more than 1,000 different channels, gaining over 7.8 billion views. You can watch MegaLag’s video in its entirety below.
