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Honey Allegedly Hijacks Affiliate Links

Reading Time: 4 minutes.

“If you’re not paying for the product, it’s because you’re the product.” It’s a familiar phrase, especially common as websites moved to selling our personal data instead of selling us a product. When Honey first came out, that’s what I figured they were doing. They don’t even have to be overly invasive, watching all of your internet traffic. They could just sit on the checkout pages and read the items your purchasing, using that data to build an advertising profile they can sell.

Sure, it’s not the most ethical business model, but it’s a familiar one. It’s what you’d expect out of a plugin like Honey, especially after PayPal bought it for a whopping $4 billion in 2019. The theory was that PayPal could expand their business with better insight into what customers were buying. Data is money, it checks out.

However, according to some fantastic research by MegaLag, Honey may be engaging in some far more deceptive money-making schemes than we realized. What he found is a program that seems to steal affiliate money—basically sales commissions—of those who rely on affiliate marketing.

A giant corporation stealing sales commissions? What, am I working in retail again?

Just What is Affiliate Marketing?

Let’s say you’re browsing the web and you find a website or video advertising a product. Maybe it’s a review, maybe it’s just an obviously promotional piece of content. Either way, they say, “Click the link in the bio for 5% off your first order with code LeafAndCore,” for example (no, I don’t actually do this). It’s a win for consumers, who get a little discount, and a win for the person or company referring you to that product, as they will get a small percentage of sales, like a commission.

Basically, when you click an affiliate link, if you make a purchase, the person who referred you to the sale gets a small kickback. This is usually the last person you “talked” to. In internet speak, it’s the last link you clicked to lead you to a page and a sale. So even if you went to the website 10 times, maybe with 5 different affiliate links, only the last link gets the commission. This is called “last-click attribution.” Some affiliate programs will give out a percentage to everyone involved with a sale, basically sharing the commission among all the sales people involved. However, because last-click attribution is so easy to implement, it’s the most common form used. Companies selling their products don’t care about ensuring everyone sending them customers gets paid, only that someone does, so they continue to send sales over. While this could hurt smaller creators, for larger ones, the ones companies care most about, it all averages out.

How is Honey Allegedly Stealing These Commissions?

MegaLag’s full video (above) is definitely worth a watch, and shows alleged proof of Honey’s “scam.” According to the claim, it’s like a sales commission at a retail store. If Alice helped you buy that new cellphone, she gets maybe $10 more on her paycheck for referring that brand. She gives you her card to show at the register for a discount and to ensure she gets that commission. However, imagine if, right before the cash register, Bob takes the card Alice gave you and instead gives you his back. He might not offer you a larger discount than that offered by Alice, the person who sold you on this purchase, but now when you check out, only Bob gets the commission. Pretty sneaky. If anyone tried that in retail, they’d likely be fired and have to replace at least 4 slashed tires on their car before going home. But online, it can mean stealing that last-click attribution.

According to research by MegaLag, Honey does just that. When you get to the checkout page, if you use Honey, it will try a variety of coupon codes. Some of these may save you money, but they also may remove the attribution of the person who actually made the sale that day. In effect, Honey is—allegedly—making money from stealing commissions. Perhaps the worst part of this is, Honey went to many of these online creators and offered them participation in affiliate programs. Honey supposedly paid these creators to get their viewers to use the very plugin that could—ahem, allegedly—steal their later affiliate link revenue.

On top of that, they also reportedly sell their product to storefronts as a way to limit how much a person can get via their discounts. According to the claim, they’ll withhold some of the best deals from consumers at the request of the companies making deals with Honey, running contrary to the entire selling point to consumers.

What Does This Mean for Consumers?

PayPal’s VP of corporate communications, Josh Criscoe, replied in an email to The Verge stating that “Honey follows industry rules and practices, including last-click attribution.” Of course, those rules don’t say anything about not removing any previous attributions, or using a plugin that can strip the last-click attribution from the person who actually sent you to the website. In other words, the company does not appear to be denying these claims.

Depending on how you feel about this, you may want to stop using Honey. If the allegations are true, and there appears to be clear video evidence showing that they are, then PayPal’s Honey may be, at the very least, taking commissions from affiliate marketers. That’s the only way some of these creators can make money. Some of the very creators Honey asked to hype their plugin may be losing money due to that plugin. It’s especially damning when you realize just how large of a company PayPal is. This is the company behind many online purchases and even transferring money between individuals with Venmo. If you care about the people who make content online, perhaps it’s time to go back to “clipping” your own coupon codes. If it’s true that Honey does not pass along the best deals available, then you might actually save some money.

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