Did Mr. Beast Know Honey Was a Scam? How Money Saving Browser Scammed Both Fans and Influencers, Explained

Everyone has seen the ads from Mr. Beast about Honey, the web extension that finds the best discount coupons for any purchase. The influencer has plugged the company in many of his videos and Honey has also been promoted by other personalities like Marques Brownlee, Linus Tech Tips, and more.

A recent expose by the channel MegaLag uncovered some dark allegations about Honey. The channel reported that it was scamming not only its users but also the influencers who promoted the service themselves. The company has faced other controversies in the past when it was bought by PayPal in 2020.

What is Honey and who founded it?

Mr. Beast ina promotion for Honey | Credits: YouTube/PayPal Honey

Honey, the latest favorite sponsor of influencers, is a tech company that provides discount coupons for purchases on online portals. The web browser extension can be installed on any browser and Honey promises to scour the Internet to find the best deals for any purchase.

Founded by Ryan Hudson and George Ruan in 2012, the extension first gained popularity when a beta tester reportedly leaked it on Reddit and it blew up from there. By 2013, Hudson and Ruan were reportedly having successful investor meetings and by 2017, it raised a Series C Round of $26 million (via LA Times).

While discount code apps were not novel, Honey leveraged its smooth algorithm which searched for coupon codes without leaving the merchant site and became a huge hit. By 2020, the company was bought by PayPal for a whopping $4 billion. The company mentioned that Honey would retain its founders as top management. The CEO said,

We’re thrilled to complete this transformative transaction and to welcome the Honey team to the PayPal family. The addition of Honey to our platform enables a significant step forward in our commitment to provide powerful services and tools for merchants and consumers, move beyond our core checkout proposition, and significantly enhance the shopping experience for our 300 million consumers and merchants.

According to Honey’s website, the platform earned money through a commission system from its merchant partners. It mentioned that they earn a commission when a user gets a useable discount code or when they earn PayPal rewards.

What are the scam allegations on Honey?

Marques Brownlee | Credits: YouTube/PayPal Honey

Everyone from Mr. Beast to New Rockstars has been talking about it as much as NordVPN. The browser extension has been a sponsor for multiple creators across platforms, promising the best deals for their purchases from several merchant partners. Several influencers like Mr. Beast, Marques Brownlee, Linus Tech Tips, and more have promoted the brand.

Recently, the YouTube channel MegaLag posted a video that claimed to uncover the extension’s murky practices. The video claimed that Honey was not just failing as a proper provider of the best deals for its users but also poaching money from their own influencer partners’ affiliate links.

Most influencers use an affiliate link which leads their subscribers to the product used in their videos. Should the subscribers make a purchase using the links, the influencers get a commission for promoting the product. The merchant brand reportedly gets an affiliate cookie that leads to the influencer, which acts as proof for the influencer that their video has led to the purchase.

However, the MegaLag investigation claimed that Honey was poaching the affiliate commission by the browser extension running a discount coupon search at checkout and by virtue of last-click attribution, would replace the influencer’s affiliate cookie with their own, thus taking the commission. Funnily, many of the influencers who have promoted the brand seem to have fallen for this scam.

MegaLag used the example of the channel Linus Tech Tips as a victim of this scam. The channel also revealed in a chat forum that they had terminated their partnership with Honey after they found some discrepancies in the affiliate links and had moved on to a similar extension called Karma (via Linus Tech Tips).

On top of it, MegaLag also claimed that Honey was not providing its users the ‘best deals’ the service claimed to provide. The channel mentioned that the extension usually promoted its own coupons as opposed to other discount codes despite them being cheaper for the consumer. The CEO of c/side reportedly told Technopedia,

When users purchased via an affiliate link with Honey installed, commissions intended for creators were redirected to Honey. Additionally, Honey misrepresented deals as the best discounts while partnering with companies to hide better offers.

MegaLag claimed that Honey was looting both its influencer partners and its users. The channel also mentioned that the service had sponsored over 5,000 videos across 1,000 channels. While influencers like Mr. Beast rarely use affiliate links and hence, would not be directly affected by the alleged practice, it is sure to affect hundreds of small-time creators.

Honey was also accused of being a security risk by Amazon

Mr. Beast in an ad for Honey | Credits: YouTube/PayPal Honey

The Honey extension acts as a crawler of the Internet to find the best discount coupons for purchases without the user leaving the checkout window of the merchant sites. Ideally, this should have been a win-win situation for popular merchant sites such as Amazon. However, the e-commerce giant accused Honey of being a security risk back in 2020 (via The Verge).

Users reportedly began receiving a notification that said that Honey posed a security risk due to the data it collects about the users. The notification from Amazon reportedly read,

Honey’s browser extension is a security risk. Honey tracks your private shopping behavior, collects data like your order history and items saved, and can read or change any of your data on any website you visit. To keep your data private and secure, uninstall this extension immediately.

While Amazon reportedly did not expand on the security risk claims, the data collection clause was reportedly part of Honey’s privacy policy, which reportedly said that only data that would aid consumers would be collected and stored. 

Many at the time claimed that the timing of the accusation i.e. when PayPal, a competitor bought Honey for $4 billion was suspect. Still, the site Data Requests claimed that Honey collected user data history on a large scale contrary to their privacy policy.