The Honey browser extension scam, brought to you by PayPal, class action filed

[manly]

To answer the question of "why" even use affiliate shopping sites, Rakuten has paid me a non-insignificant amount of cash back over the years. It's not much but it's better than zero. Sometimes other sites pay a little more, but I'm loathe to join multiple "ecosystems" just for a few pennies. Besides Rakuten, my fallback options are Chase Shop or Capital One Shopping (only the latter requires a browser extension IIRC).

These are not "scams" but ways for consumers to get a little of the marketing money that is flowing around.

FWIW Rakuten has excellent customer service (i.e. "where's my cash back?"). They mail me a quarterly check; I considered linking to PayPal but when they threw up a bunch of legalese, I balked.

But Honey was somewhat doing what it said for consumers: finding coupon codes and applying them (even if it was doing a bad job or partnering with some businesses to limit the distribution of good codes). They were likely making the bulk of money by stealing on the affiliate referral side. I don't see how the typical consumer would identify that or understand what was going on there. It wasn't necessarily making the consumer the product in a way that would turn off the consumer.

I think it's pretty unreasonable to expect people to really understand the ins and outs of everything they are using in the modern age. Are you expecting everyone to read through pages of TOS and EULAs on everything they use too?

Not watching the exposé video, but I don't consider this egregious behavior. Yeah rewriting the affiliate tracker is a bit scummy, but in essence they are the last click. And as you explained, they are saving consumers money, even if they are siphoning away a small portion.

Nobody reads TOS/EULAs, not even nerds like us. lxskllr is giving people WAYYYY too much credit.

 

[Brainonska511]

Capital One Shopping (only the latter requires a browser extension IIRC).

If you have a Capital One card, you can get access to some of their cash back offers through a web portal instead of a browser extension; you just have to use the Capital One card to pay. Not sure if they're the same program though.

 

[lxskllr]

Yea, Rakuten's a sweet deal. An incomplete list from their privacy policy...

• Commercial Information about you, such as records of products, product types, merchants, merchant types, goods or services purchased, obtained, or considered by you, including products, merchants and coupons you searched for, viewed or clicked, items added to cart and abandoned, shopping trips initiated, merchant sites visited from our Services, transaction history related to our Services, purchase confirmation data, accrued cash-back, American Express Member points, and other loyalty currency
• Internet and other Network Activity, such as your browsing and search history and your interactions with our sites and Services, including:
• Products, coupons, offers, or merchants you search, click, favorite, and/or view, including clicks you make on the merchant sites you visit within our mobile app;
• URLs of the pages you visit, including those tracked by our browser extensions and mobile application;
• Date and time stamps associated with such browsing, searches, and clicks;
• Click stream data, meaning the page by page clicks that you make as you navigate through our Services, including the web page visited before you came to our website;

It's spyware for princely sum of $100/yr(avg as stated by them). No thanks

 

[mindless1]

Not watching the exposé video, but I don't consider this egregious behavior. Yeah rewriting the affiliate tracker is a bit scummy, but in essence they are the last click. And as you explained, they are saving consumers money, even if they are siphoning away a small portion.

Nobody reads TOS/EULAs, not even nerds like us. lxskllr is giving people WAYYYY too much credit.

Except they aren't necessarily saving consumers money, if they have no coupon to offer or it's a lower value coupon than can be had elsewhere, then if their presence gives the customer the false impression that they shouldn't hunt for a better coupon, then their trust in Honey is costing them money.

Another way to look at it is, a lot of the items I buy, have no affiliate involved, and the same is true for a lot of shoppers. They go to the merchant site directly with a product in mind, not waiting for someone else to suggest and affiliate link to something to buy. The result is that a large % of the time, the merchant isn't paying out any affiliate commission on sales.

Now get Honey involved, and if everything the customer buys, always has Honey sneaking in their affiliation, multiplied by a large user base, this reduces the merchant profit by a larger amount and as it happens with a higher and higher % of customers, the average price for everyone goes up.

 

[Heartbreaker]

These are not "scams" but ways for consumers to get a little of the marketing money that is flowing around.

You mean, they aren't scamming you.

They are almost certainly scamming the Advertisers/Creators that drive traffic to those deals by last minute sniping of their commissions.

I've never used any of these plugins because I knew there had to be something shady going on. Now it finally makes sense.

Rakuten does seem to offer more cashback than the others, but that would have me questioning what extra scam are they running that we don't know about.

 

[Brainonska511]

Rakuten does seem to offer more cashback than the others, but that would have me questioning what extra scam are they running that we don't know about.

I imagine that one thing they could be doing: giving a bigger slice of the commission as an enticement to use their cashback universe.

 

[lxskllr]

Or they could just spy on you and create datasets that have monetary value, as I pointed out by copy/pasting a part of their published privacy policy which tells you they do exactly that.

 

[manly]

If you have a Capital One card, you can get access to some of their cash back offers through a web portal instead of a browser extension; you just have to use the Capital One card to pay. Not sure if they're the same program though.

I do, but the only reason I even signed up for CapOne Shopping is when they had a massive offer for an annual Max sub. That's still the only time I've used CapOne Shopping. I leave the extension disabled.

The reason I mentioned a browser extension is because of some of the alarmism ITT over Rakuten's privacy policy. I won't use their browser extension, so I believe (perhaps mistakenly) that they receive a limited data set from the merchant when I place an order. Obviously if you choose to use a browser extension such as Honey, then all bets are off.

If I cared that much about privacy, I'd have to ditch using Gmail and Android and I'm just not that worried even though Google is only slightly better than Meta these days.

It's kind of hilarious that people are calling online shopping cash back a scam. If you want to argue merchants are paying out commissions and not getting value*, that's logical. Notice that Amazon doesn't have consumer cash back anywhere (few exceptions); and in the U.S. they are approx. HALF of online shopping. So clearly they long ago decided that a tiny rebate to consumers isn't worth it. Note they do have affiliate marketing, but we can guess that their commission to the referrer is very tiny.

* Because a consumer was already inclined to place the order anyway. Note that the ONLY time I use a click-through referral link is when there's Rakuten CB. Otherwise I go directly to the merchant site so that they capture the maximum net profit. And obviously U.S. corps do sell consumer data all the time, but they'd still do that without affiliate marketing programs. The only way to opt out entirely is to shop locally, and always pay in cash. No thanks.

 

[gorobei]

leonard french did a nice summary.

the basics everyone has already mentioned are covered
-stealing affiliate money with last click stealing
-not actually finding a coupon but still taking last click

everyone can debate how scummy it is to steal the last click referral and whether it is a legit steal if honey didnt actually find a discount for the customer, but.........

the bigger thing is damage to the original referrer/content creator.

ad spending is based on how much activity/sales a referrer generates. if linus sends a bunch of viewers who become customers, the company knows how many clicks/sales linus generated and may choose to increase their ad buy from linus next time. if honey steals these referrals then it looks like the content creator isnt generating as much business as they used to, so they company reduces their ad buys from those creators. honey in that case is actively hurting the creator's business(ad sales) and interfering with the relationship between the creator and the company buying the ad(ability to get future ad sales). that is a big no-no in business/legal world.

 

[Heartbreaker]

leonard french did a nice summary.

the basics everyone has already mentioned are covered
-stealing affiliate money with last click stealing
-not actually finding a coupon but still taking last click

everyone can debate how scummy it is to steal the last click referral and whether it is a legit steal if honey didnt actually find a discount for the customer, but.........

the bigger thing is damage to the original referrer/content creator.

ad spending is based on how much activity/sales a referrer generates. if linus sends a bunch of viewers who become customers, the company knows how many clicks/sales linus generated and may choose to increase their ad buy from linus next time. if honey steals these referrals then it looks like the content creator isnt generating as much business as they used to, so they company reduces their ad buys from those creators. honey in that case is actively hurting the creator's business(ad sales) and interfering with the relationship between the creator and the company buying the ad(ability to get future ad sales). that is a big no-no in business/legal world.

If I was the advertiser, I would also be interested in blocking Honey. Once you understand their business model, they aren't actually bringing in any business. They just pop up at the last second when customers are at the checkout to snipe commissions. As the advertiser, you also want to reward who actually brings in the sales, since as you mentioned, so you know where to target future advertising.

Also with Honey and others sharing this business model, they are just hanging around the checkout, so even buyers that just went to you without any advertising, are causing you to pay commissions needlessly in those cases (again for nothing).

Honey is basically screwing everyone.

 

[Lost_in_the_HTTP]

You mean, they aren't scamming you.

They are almost certainly scamming the Advertisers/Creators that drive traffic to those deals by last minute sniping of their commissions.

I've never used any of these plugins because I knew there had to be something shady going on. Now it finally makes sense.

Rakuten does seem to offer more cashback than the others, but that would have me questioning what extra scam are they running that we don't know about.

And this is a problem ... how?

I do, but the only reason I even signed up for CapOne Shopping is when they had a massive offer for an annual Max sub. That's still the only time I've used CapOne Shopping. I leave the extension disabled.

The reason I mentioned a browser extension is because of some of the alarmism ITT over Rakuten's privacy policy. I won't use their browser extension, so I believe (perhaps mistakenly) that they receive a limited data set from the merchant when I place an order. Obviously if you choose to use a browser extension such as Honey, then all bets are off.

If I cared that much about privacy, I'd have to ditch using Gmail and Android and I'm just not that worried even though Google is only slightly better than Meta these days.

It's kind of hilarious that people are calling online shopping cash back a scam. If you want to argue merchants are paying out commissions and not getting value*, that's logical. Notice that Amazon doesn't have consumer cash back anywhere (few exceptions); and in the U.S. they are approx. HALF of online shopping. So clearly they long ago decided that a tiny rebate to consumers isn't worth it. Note they do have affiliate marketing, but we can guess that their commission to the referrer is very tiny.

* Because a consumer was already inclined to place the order anyway. Note that the ONLY time I use a click-through referral link is when there's Rakuten CB. Otherwise I go directly to the merchant site so that they capture the maximum net profit. And obviously U.S. corps do sell consumer data all the time, but they'd still do that without affiliate marketing programs. The only way to opt out entirely is to shop locally, and always pay in cash. No thanks.

.. offered me $10 to do so.

Then they kept posting sign up offers and when I saw one for $50, I created a new profile with a new email address and phone number to take them for that too.

 

[Torn Mind]

Privacy is an issue, but most people already lost it the moment they got a email account from the big three American companies. And I for one, even don't quite believe Protonmail doesn't have a link to Interpol or Swiss/EU law enforcement even if they don't help the "new white pages on crack" companies in the US.

I mean heck, somehow one of my emails got signed up for political newsletters from Biden/Harris....one I manage for my mom and don't give out on a whim.

 

[nakedfrog]

And this is a problem ... how?

I realize you won't care because that's your MO, but some people do specifically buy things through the affiliate links of content creators they enjoy as a way to help fund continued content creation. So this does actually affect content creators that are small, independent humans, some of whom are still making their stuff by themselves without support staff or anything.

 

[Heartbreaker]

I realize you won't care because that's your MO, but some people do specifically buy things through the affiliate links of content creators they enjoy as a way to help fund continued content creation. So this does actually affect content creators that are small, independent humans, some of whom are still making their stuff by themselves without support staff or anything.

This, plus it's especially galling when it's a massive multi-billion dollar corporation that is stealing from the little independents.

This is the kind of crap I'd expect from sleazy Russian hackers. This is PayPal with a 80+ Billion dollar market capitulation.

 

[mindless1]

And this is a problem ... how?

Suppose you saw someone stealing a purse from a little old lady. It's not your problem or mine, but the principle, the sense of maintaining order and justice, including getting that lady back what is hers, still matters to me.

Besides, Honey only did part of the work (like 0.01% when you consider it's automated instead of a real personal shopper stepping in to assist) and none of it to generate the sale, so if anything their max commission should be, IF they came up with a viable coupon, the 5% or whatever %, of the coupon value not the single item from latest click through, and especially not the entire cart contents purchased.

It's also a problem because it drives up prices for everyone. If Honey is making money off non-affiiliate linked purchases, which they seem to be, the merchant is losing money a greater % of the time and will have to increase cost of goods to offset that. My ratio of buying something from a youtuber affiliate link vs independently browsing to a merchant to buy something with no youtuber involved is roughly 1:500. I have practically never, not realized that I needed something until some youtuber told me that I did, lol, so in those 499 cases, merchant makes full profit minus any coupon I find on my own, but does not pay anyone an affiliate commission.

[rant]I have mixed feelings about affiliate commissions in the first place. I see some youtuber making a video and it's like "here's a list of everything in my video", yet what they link, is not necessarily the best of it's type of product, or even the best value for the purpose, not necessarily the cheapest seller of that make/model of product, usually NOT on sale, often higher priced from same merchant than back when the video and link was made if not a very recent video, and even more issues I can't think of at the moment.

Sometimes they're just throwing crap your direction to make more profit, (like do I need to know where you got your phillips screwdriver?!) when it was always dubious to me whether certain channels were worthy of making any profit at all, especially if just stealing or at least heavily repeating content elsewhere instead of generating content worthy of profits, but if someone lands on that channel's video before seeing the other content, it seems like revelatory work put into it, when it just wasn't. I do not dismiss the amount of labor that many channels put into PRODUCING their content, but that's the cart before the horse if the content wasn't worthy in the first place, just a machine cranking out anything for a new video. Obviously this applies much more to some channels than others, even more so for the non-tech channels.

At the same time, free will and all, people can patronize anything that youtube shoves at them, and buy whatever they want, but how much affiliate commission do they really deserve if they are just rehashing content from a different channel, or even their OWN channel? Still more than Honey, the way I see it. [/rant]

 

[manly]

Fair points all around, but people have a really utopian viewpoint of American capitalism LOL. I too try to avoid the affiliate click-through (except when CB applies) but worrying that Honey and Rakuten extensions are driving up prices all around is a bit much. I totally agree that a content creator that most influenced the sale shouldn't be robbed by Honey.

Keep in mind OP churns banking account bonuses, which is fully legal, but those costs are clearly being spread across other customers.

 

[Muse]

I imagine that one thing they could be doing: giving a bigger slice of the commission as an enticement to use their cashback universe.

Simple deduction. But what's in that "universe?"

There's a Rakuten subreddit: r/rakuten

This looks fertile:

I'm a massive savings nerd. Here are the stupidest money mistakes I see people make.

https://www.reddit.com/user/thecouponnerd/comments/1hs3u91/im_a_massive_savings_nerd_here_are_the_stupidest/?p=1&impressionid=5203802460291923966

 

[Torn Mind]

Fair points all around, but people have a really utopian viewpoint of American capitalism LOL. I too try to avoid the affiliate click-through (except when CB applies) but worrying that Honey and Rakuten extensions are driving up prices all around is a bit much. I totally agree that a content creator that most influenced the sale shouldn't be robbed by Honey.

Keep in mind OP churns banking account bonuses, which is fully legal, but those costs are clearly being spread across other customers.

That money is given out because of interest income and that the bank makes it back by loaning it out. There's also just hitting numbers so Wall Street is happy.

 

[pmv]

It doesn't even make sense. Somebody's losing in the scheme. That's the only way it can work. Why would anyone offer you a coupon when you're at the 'buy this shit now' page? The seller isn't interested in losing money. The user isn't paying in $. I didn't watch the whole video, but it wouldn't surprise me if the user was paying some in personal data. Honey is a for profit company, so where's the profit? The profit is from the people getting fucked.

I've known of Honey for a good while, but I don't use coupons unless I already have a relationship with the vendor, and I don't use proprietary software. I ran it through my head, and came to the conclusion in the first paragraph, and I knew nothing about them at that point. People need to be more discerning. It screams late 90s IE scamware. Animals are trapped with trivial amounts of food. Be smarter than a dumb animal.

Never really understood the concept of 'coupons'. There are certain on-line vendors that offer 'coupons', but as far as I can tell it's just an overly-complicated way to have a sale. i.e. they tell you on the home page itself to enter this code at checkout, and then if you do you get, say, 10% off. I don't really grasp the point of it - why don't they just reduce all their prices by 10% for the duration of the validity of the coupon/duration of the sale (which are basically the same thing)?

I can only assume it's some weird psychological trick to make you more conscious of getting a 'bargain' - but not sure it's any different from traditional sales (Steam seems to manage perfectly well at sucking in fools like me to buy too much in such time-limited sales, without employing all the 'coupon' nonsense). Installing some browser extension to 'find' such coupons seems pointless (and potentially a spyware risk).

 

[lxskllr]

I can only assume it's some weird psychological trick to make you more conscious of getting a 'bargain'

I think this is it. Especially when you get emails announcing the coupons. It works on me. If I use a coupon, it's likely to be for arborist supplies. I'll get a notice of n% off, and the wheels start turning thinking of stuff I want/need. Companies may also be in partnership with manufacturers, and arrange money off select products. On practical level, it might make the web design easier. Leave the prices what they always are, and just have a coupon code to reduce the price. I don't know web design, so I don't know how compelling that argument is.

 

[mindless1]

^ Yes it's more labor to change product prices even if it can be done by categories and just exclude some, then have to change those prices back, and coupons come in different value $-off or %-off sometimes running concurrently, and many merchants won't price match if the lower price is due to a coupon.

Psychological trick? Possibly in some cases but in others, unless the merchant jacked up the price just before their coupon-sale, the coupon allows you to see the regular price to contrast that against the amount saved with the coupon.

Plus it's similar to how coupons always were, like for grocery stores. People who have a budget where they benefit from putting in the extra work to get a coupon, reap the savings while those better off or apathetic about further savings, may not use a coupon.

Per item rather than site wide coupons can also be an incentive to try a new product without just making the product look cheaper in comparison to other alternatives which some customers perceive as lower quality.

It's also easier to set up that a coupon can be used X # of times before it expires rather than aggregating all the different purchase quantities made for every particular item adjusted to a lower sale price (though amazon does this, with or without a coupon, but they have the resources to do that better than most merchants). Many different reasons a coupon can be offered.

 

[pmv]

^ Yes it's more labor to change product prices even if it can be done by categories and just exclude some, then have to change those prices back, and coupons come in different value $-off or %-off sometimes running concurrently, and many merchants won't price match if the lower price is due to a coupon.

Surely with an internet store it's no harder to give time-limited discounts without a coupon than with one?

Psychological trick? Possibly in some cases but in others, unless the merchant jacked up the price just before their coupon-sale, the coupon allows you to see the regular price to contrast that against the amount saved with the coupon.

But it's just as easy to show the 'original price' and note the reduction. Steam does that perfectly well (and it works just as well, if my stupid Steam backlog is anything to go by). Just (in passing - not like it's a vital issue or anything) wondering if making the buyer go to the effort of noting and typing in a 'discount code', has some greater psychological effect, in terms of feeling like it's a real saving, than just a blanket "X % OFF for one day only" sale.

 

[mindless1]

Surely with an internet store it's no harder to give time-limited discounts without a coupon than with one?

Some do, do this, but time limited discounts alone, don't take into account the # of redemptions you want to allow.

But it's just as easy to show the 'original price' and note the reduction. Steam does that perfectly well (and it works just as well, if my stupid Steam backlog is anything to go by). Just (in passing - not like it's a vital issue or anything) wondering if making the buyer go to the effort of noting and typing in a 'discount code', has some greater psychological effect, in terms of feeling like it's a real saving, than just a blanket "X % OFF for one day only" sale.

"Just as easy"? Not really. It's easier not to change the product listing at all. What Steam does, doesn't make it just as easy, plus if I'm mistaken, Steam doesn't have millions of products potentially affected by a coupon discount?

I don't think it's as much a psychological effect as you're making out to be, rather as already stated, some people won't use the coupon and others recognize that if it wasn't plastered onto the product page, that they may be getting a couple that not everyone gets, which works back towards what I posted a while back, that if everyone gets the discount automatically, ultimately it just raises the long term prices for everyone, including after that discount, while coupons tend to have a lower redemption rate, raising the prices less and resulting in lower total cost for those who use them.

Shoppers are more savvy than that these days, can at least recognize when one total price is lower than another. There may be many variables that thwart their efforts to get the best product or value for their needs, but can generally understand one number being lower than another.

I'm seeing less and less of the "blanket X % off for one day only sale" on the internet, is more of a B&M thing while online merchants are more subject to wide variations in sales rate till stock is depleted based on the # of online sources that promote the deal.

Would I rather that items were just displayed at a sale price instead of coupons? Not at all. I've shopped both ways and coupons offer significant extra savings, especially at places like amazon. Depends on the merchant though, I seldom find coupons for Home Depot for example, but then they have their "Special Buys" in addition to the advertised sales, but they are as much a B&M merchant so things are a little different. B&Ms are more likely to not offer perpetual rolling coupon codes. Honey, I have no use for, their games of showing coupons that may or may not work, are never better discounts than I can find myself.

 

[gorobei]

Never really understood the concept of 'coupons'. There are certain on-line vendors that offer 'coupons', but as far as I can tell it's just an overly-complicated way to have a sale. i.e. they tell you on the home page itself to enter this code at checkout, and then if you do you get, say, 10% off. I don't really grasp the point of it - why don't they just reduce all their prices by 10% for the duration of the validity of the coupon/duration of the sale (which are basically the same thing)?

I can only assume it's some weird psychological trick to make you more conscious of getting a 'bargain' - but not sure it's any different from traditional sales (Steam seems to manage perfectly well at sucking in fools like me to buy too much in such time-limited sales, without employing all the 'coupon' nonsense). Installing some browser extension to 'find' such coupons seems pointless (and potentially a spyware risk).

its mindset. the manufacturer has a price that the want in the heads of the customer and they dont want them to see a sale or one time lower price as 'the real price' that the item really costs or should cost. even with a theoretical comfortable profit margin on the msrp, every time the maker/bulk-distributor/middleman/retailer decides to shave the price down a little to move inventory to get liquidity the customer views the price fluctuation as meaning they are overpaying.

a coupon is a theoretical one time opportunity, and it doesnt change the "normal" price. all the coupons and rebates are meant to be a hurdle to provide friction to the process, so at the end of it all the customer conditioned to thinking of it as not worth the trouble. the issue is at some point people stop buying as often or buy the absolute cheapest version which leads to a race to the bottom in quality/features.

there is a whole branch of study to price skimming.

the other issue is US consumer psychology. a while back a department store chain rolled out a this is the actual price of the item policy. it was a cut to the bone price and they couldnt go any lower. americans so used to "getting a deal" just kept waiting for the sale but it never came. sales and therefore profits tanked and the pricing strategy was ended. it may just be us and our screwed up thinking. on the other hand, Aldi and chains like Trader Joes have relatively steady prices with discounts only when they have made a mistake in predicting their order size.

 

[manly]

Never really understood the concept of 'coupons'. There are certain on-line vendors that offer 'coupons', but as far as I can tell it's just an overly-complicated way to have a sale. i.e. they tell you on the home page itself to enter this code at checkout, and then if you do you get, say, 10% off. I don't really grasp the point of it - why don't they just reduce all their prices by 10% for the duration of the validity of the coupon/duration of the sale (which are basically the same thing)?

I can only assume it's some weird psychological trick to make you more conscious of getting a 'bargain' - but not sure it's any different from traditional sales (Steam seems to manage perfectly well at sucking in fools like me to buy too much in such time-limited sales, without employing all the 'coupon' nonsense). Installing some browser extension to 'find' such coupons seems pointless (and potentially a spyware risk).

Price discrimination - Wikipedia

en.wikipedia.org