A recent investigation by MegaLag has shed light on potentially misleading practices by Honey, the popular web browser extension that promises consumers discount codes for online shopping. Despite its free and widely promoted nature, the investigation suggests that Honey may be costing consumers money and unfairly benefiting businesses.
A significant tool for encouraging purchases
Honey, launched in 2012, quickly gained popularity after being leaked on Reddit and went viral. By 2014, the extension had already amassed over 900,000 users. This growth coincided with the rise of online shopping, where discount codes became a significant tool for encouraging purchases. Companies began using discount codes to offer generic or personalized discounts, attracting more customers.
The promise of Honey was simple and appealing: Install the extension, and it would automatically apply the best discount codes available, even if you missed them during your shopping. Many users, including the author, have experienced the frustration of missing out on discounts, making Honey’s offer highly enticing.
As the platform grew, Honey attracted millions of dollars in funding. In 2020, PayPal recognized its potential and acquired Honey for $4 billion, rebranding it as PayPal Honey.
How Honey Might Be Costing You Money
While Honey’s pitch to consumers seemed straightforward, MegaLag’s investigation reveals that the extension may have been misleading users, often benefiting businesses and Honey itself. The idea was that Honey would automatically apply the best available discount codes, ensuring users always get the best deal. However, what MegaLag uncovered is far from reassuring.
According to MegaLag, discount codes often create complications for businesses. “Every single time a discount code is created, the same conversation takes place: ‘What happens if this leaks on Reddit?’” When discount codes do leak, Honey’s role was initially to pick them up and apply them for users, even if they were unintended by the business.
But over time, Honey began partnering with businesses to offer specific discounts, such as the “HONEY10” code for 10% off. The investigation highlights instances where Honey would promote these codes, disregarding those that offered larger savings. As a result, the very tool designed to save consumers money may have been encouraging them to settle for lesser discounts.
In these cases, Honey’s extension inadvertently misled consumers into thinking they were getting the best possible deal, when in reality, they were missing out on larger savings.
Impact of Honey on Influencers
MegaLag’s investigation also delves into the impact of Honey on influencers, particularly those who have promoted the extension, such as Linus Tech Tips and Marques Brownlee. The investigation reveals a troubling aspect of Honey’s behavior—how it steals credit for sales generated by influencers through affiliate marketing.
Affiliate marketing is common in the online world. Influencers or platforms like Goosed may recommend products and include affiliate links. When users purchase through these links, the influencer or platform earns a small commission without affecting the price for the consumer. However, according to MegaLag, if a user has Honey installed and clicks on an affiliate link, Honey’s algorithm takes the credit for the sale, redirecting the revenue away from the influencer or platform.
While the impact on revenue channels for influencers like Goosed may not be directly felt, the broader issue is Honey’s deceptive practices, which mislead consumers and divert resources from those who have genuinely contributed to the sale.
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