PayPal Honey Alleged Scam: How a Browser Extension Reportedly Diverts Millions from Creators and Businesses

What is PayPal Honey?

PayPal Honey is a browser extension that claims to automatically find and apply coupon codes at checkout. With over 17 million users and acquired by PayPal for $4 billion in 2020, it has become one of the most widely-used shopping tools on the internet. But beneath the surface of this "free money-saving tool" lies what critics allege is a sophisticated scheme that has been systematically diverting affiliate commissions from content creators and exploiting online businesses, including thousands of Shopify stores and ecommerce merchants across all major platforms.

The extension is promoted by thousands of YouTubers, podcasters, and influencers who earn affiliate commissions when their audiences install Honey. What these creators may not realize is that Honey allegedly diverts commissions from them through a practice known as affiliate hijacking or cookie stuffing.

This ecommerce industry investigation, based on Honey's publicly available store data obtained from their extension and shared by independent researchers, reveals the true scale of their operation and exposes how they profit at the expense of creators, online businesses, and consumers alike. Our store analytics reveal patterns that every ecommerce entrepreneur and online store owner should understand.

How the Alleged Scam Works

The alleged Honey scam operates through a mechanism called "last-click attribution" hijacking. Here's how it reportedly works:

"Honey reportedly takes a 97.5% cut of affiliate commissions, passing only 2.5% back to users as 'Honey Gold' rewards. This means when Honey allegedly diverts a $10 commission from a creator, users get roughly $0.25 in rewards."

About This Dataset: Honey's Publicly Available Store Data

The dataset presented in this investigation was obtained through publicly accessible endpoints that Honey exposes for their browser extension to function. When you install the Honey extension, it needs to know which stores it supports, what coupon codes are available, and which stores have affiliate partnerships. This information is fetched from Honey's servers in real-time.

This publicly accessible data was compiled into a comprehensive dataset of 173.9K stores. This market research dataset represents Honey's complete store directory and includes valuable store insights and ecommerce analytics into their business practices — essential intelligence for competitor analysis and understanding affiliate marketing dynamics.

Data Analysis: 173.9K Stores Exposed

Our data analysis reveals disturbing patterns in how Honey operates. The most striking finding from our ecommerce research is that 84.4% of stores (146.7K out of 173.9K) have no affiliate partnership with Honey. This means these online stores were added to Honey's database without their knowledge or consent, and their coupon codes are being collected and distributed without permission — affecting store performance and revenue tracking across the industry.

Cookie Stuffing and Last-Click Attribution Concerns

Cookie stuffing is a form of alleged affiliate fraud where a third party places tracking cookies on a user's browser without their knowledge or without them taking a genuine action that would merit attribution. Honey's approach is a sophisticated variant of this: they wait until the user is at checkout, then activate their extension to claim the "last click" attribution.

Most affiliate programs use last-click attribution, meaning whoever was responsible for the "last click" before a purchase gets the commission. Honey exploits this by inserting themselves at the very last moment — even when they provide no value to the transaction.

Who Gets Hurt by Honey?

Content Creators and Influencers

Content creators are perhaps the biggest victims of Honey's scheme. When they promote products with affiliate links, Honey users who watch their content and later make purchases will have their commissions stolen. The cruel irony is that many creators actively promoted Honey, unknowingly encouraging their audiences to install software that would steal from them.

Small and Medium Ecommerce Businesses

Our store analytics show that 146.7K online stores are in Honey's database without any affiliate partnership. These ecommerce businesses — including Shopify stores, WooCommerce merchants, and independent retailers — have their private coupon codes harvested, shared publicly, and used without permission. Employee discount codes, VIP customer codes, and influencer-specific codes all end up in Honey's system, devastating their marketing ROI and promotional strategies.

Consumers and Online Shoppers

While Honey positions itself as a money-saving tool, consumers are hurt in several ways: privacy invasion through traffic tracking across 173.9K stores, inferior codes compared to what's actually available, and unknowingly participating in alleged commission diversion from creators they follow. The shopping data collected enables unprecedented consumer behavior analysis and targeted advertising.

Affected Creators: Documented Case Studies

While Honey has affected hundreds of thousands of content creators, several high-profile cases have been documented through investigations by researchers like MegaLag. These case studies reveal the systematic nature of Honey's affiliate hijacking and the significant financial impact on creators of all sizes.

Other Notable Affected Creators

These documented cases represent just the tip of the iceberg. With over 17 million Honey users and hundreds of thousands of affiliate marketers, the total number of affected creators likely numbers in the hundreds of thousands, with collective losses potentially reaching hundreds of millions of dollars.

Estimated Industry-Wide Creator Losses

Using data from this Honey database and industry affiliate marketing statistics, we can estimate the potential scale of alleged commission diversion affecting content creators worldwide.

Losses by Creator Category

These figures are conservative estimates based on publicly available data from Honey's extension. The actual losses could be significantly higher when accounting for all affiliate networks, smaller creators, and the compounding effect of lost repeat customers who now use Honey for all purchases.

Commission Loss Calculator

Are you a content creator, blogger, or affiliate marketer? Use our calculator below to estimate how much money you may be losing due to Honey's practices. This tool uses industry averages and data from our investigation to provide a realistic estimate of your potential losses.

Honey's Harvested Coupon Codes and User-Generated Content

One of the most troubling aspects of Honey's operation is how they collect coupon codes. Our investigation found 1.7K stores with "user-generated" coupon codes in Honey's database. These are codes that Honey's users have submitted or that have been harvested from across the internet.

This includes private employee discount codes, influencer-specific codes designed to track which creator drove sales, limited-time promotional codes, and VIP customer codes meant for loyal customers only. When these codes are collected and shared through Honey, it undermines businesses' ability to run targeted promotions, track marketing effectiveness, and maintain accurate revenue analytics for their online stores.

Small Business Extortion: Pay Up or Suffer

Perhaps the most disturbing aspect of Honey's business model is what happens when businesses discover their private codes have been leaked. When store owners contact Honey demanding to be removed from the platform, they're met with a calculated response: "Partner with us, and you'll have control over your codes."

This practice, which many business owners describe as "extortion," was exposed through email exchanges between Honey and Chip Malt, CEO of Maiden Cookware. When Chip discovered Honey had leaked a private friends-and-family discount code, he demanded removal from the platform.

This was proven to be a lie. Another business owner, Andrew from Target Texture Supply, shared his email exchanges with the same Honey employee, who successfully had his store removed from the platform — just one month before telling Chip it was "impossible."

"Nine times out of 10, the response is: join our affiliate program and you'll have more granular control. Merchants feel like they're being blackmailed or extorted." — Marketing industry expert on Honey's practices

The pattern is clear: Honey deliberately added 146.7K online stores to their platform without consent, creating problems for those ecommerce businesses, then leveraging those problems to force paid partnerships. It's a textbook protection racket operating at scale across the entire online retail industry.

Data Collection: 2,500 Pages of Your Shopping History

While Honey marketed itself as "actually free, not like selling all your personal data free," the reality is far more invasive. A German nonprofit called DateRequests.org submitted GDPR right-of-access requests to Honey, and the results were shocking.

From just 27 page views, investigators could determine: what products the user viewed, their order IDs, disputed orders, family subscription plans, travel plans (including Airbnb dates and locations), streaming habits, and even redeemed game serial codes. This wasn't metadata — Honey was capturing full URLs that revealed intimate details of users' lives.

This data collection wasn't a recent development after PayPal's acquisition. A 2015 Honey pitch deck to investors explicitly listed "user behavioral data, stores visited, products viewed, and purchase history" as core components of their business strategy, calling it their "unfair advantage."

In 2024, PayPal announced it would launch an ad network leveraging data from its 400 million users — including Honey users. Your shopping history is now directly feeding PayPal's advertising machine.

Targeting Minors: The MrBeast Connection

Honey's privacy policy explicitly states: "We created Honey for the exclusive use of adults 18 and older, and we don't knowingly collect or solicit personal information from children." Yet their marketing strategy tells a completely different story.

MrBeast, one of the most popular YouTubers in the world, became Honey's biggest sponsor. His Honey-sponsored videos garnered over 3 billion views, representing more than one-third of Honey's total sponsored views on YouTube. The problem? MrBeast's audience skews heavily toward children and teenagers.

But MrBeast wasn't the only child-focused channel Honey sponsored. They paid for sponsorships on:

• Minecraft channels — games predominantly played by children
• Roblox channels — platform with a median user age of under 13
• Cartoon and animation channels — clearly targeting young audiences
• A 14-year-old influencer — Desiree Machado, whose "Back to School" video was Honey-sponsored

Many jurisdictions have strict regulations around collecting personal data from minors, often requiring parental consent. By claiming their service is "for adults 18 and older" while actively marketing to children, Honey may have violated data protection laws in numerous countries.

Legal Consequences: 20+ Class Action Lawsuits

Following the MegaLag investigation, PayPal and Honey have been hit with a wave of legal action. As of December 2024, over 20 class action lawsuits have been filed against PayPal, accusing them of:

Gamers Nexus, a prominent tech YouTube channel, is serving as lead plaintiff in one of the class action lawsuits. The investigation also triggered lawsuits against other companies using similar practices, including Microsoft, Capital One, Klarna, Rakuten, and RetailMeNot.

Google has also responded by updating their Chrome extension policies, implementing changes that block extensions like Honey from claiming undeserved affiliate commissions. Since the investigation, Honey has lost over 6 million users.

The $4 Billion Question: Why Did PayPal Pay So Much?

In 2019, PayPal acquired Honey for $4 billion. To put this in perspective: YouTube was acquired for $1.65 billion, Instagram for $1 billion, and Twitch for $970 million. Combined, these three platforms cost less than what PayPal paid for a coupon browser extension.

The answer lies not in Honey's ability to save users money, but in its data collection capabilities. Honey provided PayPal with something invaluable: a window into consumer shopping behavior across the entire internet.

"Honey's unique data allows us to predict what each user is about to buy, when they intend to purchase, and how much they are willing to pay." — Honey's 2015 investor pitch deck

Former Honey executives openly discussed using this data to help merchants understand their customers' "cross-shopping" behavior — tracking how many other stores a user visits before making a purchase decision. This retail analytics and consumer intelligence is extraordinarily valuable for targeted advertising, pricing strategies, and competitor analysis in the ecommerce industry.

In 2024, PayPal announced the launch of its own ad network, leveraging data from its 400 million users — including Honey data. The "free" coupon extension was never the product. You were the product.

Explore the Full Dataset: 173.9K Stores

We're making our complete ecommerce research dataset of 173.9K stores available for public access. Use the interactive analytics table below to search for any online store, sort by different criteria, and explore the full scope of Honey's operation. This business intelligence resource is invaluable for store owners, dropshipping entrepreneurs, and affiliate marketers conducting competitor analysis or market research.

What You Can Do

For Content Creators

1. Stop promoting Honey — you may be hurting your own income
2. Warn your audience about how Honey allegedly diverts affiliate commissions
3. Use affiliate networks that have protections against cookie stuffing
4. Consider legal action if you have evidence of significant lost commissions

For Ecommerce Business Owners

1. Search the store database above to see if your Shopify store or online business is listed without consent
2. File a GDPR request to access and delete your data from Honey's systems
3. Implement coupon protection services that block unauthorized codes and protect your revenue
4. Use unique, one-time codes for influencer partnerships to track marketing performance accurately
5. Monitor your store analytics for unexpected traffic patterns that may indicate coupon leakage

For Consumers

1. Uninstall Honey — the "savings" aren't worth the privacy invasion
2. Use creator affiliate links to support the people whose content you enjoy
3. Be aware that using unauthorized coupon codes may hurt businesses you like

References & Sources

This investigation builds upon the groundbreaking work of independent journalists and researchers who first exposed Honey's practices. We encourage you to watch these video investigations for a deeper understanding of the scam: