Honey Scam: Allegations Against PayPal’s Browser Extension

Norman Dale3 days ago

0 5 4 minutes read

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The Honey scam has sparked heated debate online, with millions questioning the ethics of PayPal’s popular browser extension. A viral YouTube video by tech investigator MegaLag, viewed over 15 million times, accuses Honey of deceptive practices that harm consumers and influencers. This article dives into the PayPal Honey scam, exploring its impact and the ongoing legal battles, using credible sources to provide clarity.

Honey, a tool promising to save shoppers money, has been promoted by influencers like MrBeast, reaching billions of views. However, allegations suggest it prioritizes profits over users. We’ll examine what is the Honey scam, its effects, and PayPal’s response to restore trust.

What is Honey?

Honey is a free browser extension launched in 2012 by Ryan Hudson and George Ruan. It automatically applies coupon codes at online checkouts, claiming to find the best deals. PayPal acquired Honey in 2020 for $4 billion, integrating it with over 30,000 retailers and serving 17 million monthly users, according to a PayPal press release.

The extension earns commissions from retailers when users buy through it. A portion is shared as cash-back via PayPal Rewards. Honey’s popularity soared through promotions by YouTubers like MrBeast and MKBHD, amassing 7.8 billion views across 5,000 videos. Despite its appeal, the Honey scam news has raised doubts about its practices, prompting scrutiny of its business model.

The Honey Scam Explained

What was the Honey scam? In December 2024, YouTuber MegaLag released a 23-minute video titled “Exposing the Honey Influencer Scam,” accusing Honey of unethical tactics. The video, now with over 15 million views, claims Honey deceives users and influencers for profit. Here are the main allegations:

Affiliate Link Hijacking: Honey allegedly replaces influencers’ affiliate cookies with its own during checkout, even without applying discounts, using hidden tabs to ensure commissions.
Selective Coupon Display: It prioritizes partner-approved coupons, hiding better deals elsewhere, reducing user savings.
Harm to Businesses: Unauthorized coupons cause merchant losses, potentially raising retail prices.

MegaLag’s tests showed Honey claiming a $35 commission on a $95 purchase while offering users only 89 cents in rewards. These practices, he argues, betray influencers and consumers. The Honey scam gained traction when creators like Markiplier voiced distrust, with a 2020 clip resurfacing where he rejected a Honey deal, saying, “I just don’t trust Honey.”

Impact of the Allegations

The Honey scam allegations have shaken trust in the extension. Consumers may not get the best discounts, as Honey allegedly favors retailer profits. Privacy concerns arise from hidden tabs used for affiliate tracking, potentially collecting user data without clear consent.

Influencers face significant financial losses. By replacing affiliate cookies, Honey diverts commissions from creators who drive sales. For example, Linus Tech Tips, with 200 million views across 160 Honey-sponsored videos, ended its partnership in 2022 after discovering this issue. The Honey scam Markiplier connection highlights early creator skepticism, fueling the controversy.

Businesses suffer from unauthorized coupons, leading to revenue losses. This may force retailers to raise prices, indirectly harming consumers. Public reaction has been strong, with over 3 million users reportedly uninstalling Honey by mid-2025, according to 9to5Google. Social media posts reflect anger, with one influencer calling Honey’s actions “predatory.”

Legal and Corporate Response

The Honey scam response includes legal action and PayPal’s defense. In January 2025, attorney and YouTuber LegalEagle filed a class-action lawsuit against PayPal, representing creators like Wendover Productions and GamersNexus. The suit, filed in California federal court, claims damages over $5 million for stolen commissions, alleging unjust enrichment and interference with contracts, per OpenClassActions.com.

Four lawsuits now target PayPal, accusing Honey of “predatory conduct.” PayPal defends Honey, stating it follows industry-standard last-click attribution, where the final click before purchase earns the commission. Critics argue Honey exploits this by prompting unnecessary clicks, even without coupons. A Honey representative confirmed to MegaLag, “If Honey is activated last, it is likely to receive credit,” per ClassLawGroup.com.

Google updated Chrome Web Store policies in 2025 to ban extensions claiming commissions without discounts, forcing Honey to adjust. PayPal insists Honey saves users money and boosts retailer sales, but public trust remains low.

Broader Implications

The PayPal Honey scam raises critical questions about affiliate marketing ethics. Last-click attribution, while standard, can disadvantage creators when exploited. The controversy calls for stricter regulations to protect influencers, as noted in a Richmond Journal of Law and Technology article.

Browser extensions face scrutiny over data privacy. Honey’s cookie replacement practices highlight the need for user consent transparency, per Trend Micro News. Consumers are urged to seek alternatives like Rakuten or manual coupon searches to ensure better deals.

The scandal may prompt regulatory action. The Federal Trade Commission (FTC) could investigate if deceptive practices are proven, potentially reshaping affiliate marketing rules. Businesses may tighten coupon policies to prevent losses, impacting how extensions operate.

What Should Users Do?

Consumers should approach Honey cautiously. To avoid the Honey scam, consider uninstalling the extension until legal outcomes clarify its practices. Alternatives like Rakuten or RetailMeNot offer transparent coupon searches. Always download extensions from official sites like joinhoney.com to avoid fakes.

Influencers should review affiliate agreements for clear commission terms. Advocating for stand-down policies, where retailers block extensions from claiming unearned commissions, can help, per Wildfire Systems. Businesses should enforce strict coupon tracking to prevent unauthorized discounts, protecting revenue.

Conclusion

The Honey scam news reveals a troubling side to a tool once celebrated for saving money. Allegations of affiliate link hijacking and misleading coupons have sparked lawsuits and public backlash, with millions uninstalling Honey. PayPal’s defense of industry standards faces skepticism, as creators and users demand transparency.

The controversy highlights the need for ethical affiliate marketing and clearer extension regulations. Stay informed through credible sources like OpenClassActions.com and consider alternatives to protect your savings and privacy. The Honey scam explained serves as a reminder to question digital tools promising effortless benefits.
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