Former Partner Exposes The Dark Truth Behind The Biggest Youtube Scam Worth $4 Billion

Browser extensions have become an integral part of our online shopping experience, promising to enhance convenience and save us money. Among these tools, one particular extension gained massive popularity through widespread influencer marketing campaigns, reaching billions of views across YouTube and other platforms.

The Rise of a Shopping Assistant

PayPal’s Honey, acquired for $4 billion, emerged as one of the most widely promoted browser extensions in recent years. With approximately 5,000 sponsored videos across 1,000 YouTube channels accumulating 7.8 billion views, the extension promised users automatic application of the best available coupon codes during online shopping.

The premise was simple and attractive: install a free browser extension that would automatically search the internet for working coupon codes and apply the best one at checkout. This value proposition resonated with millions of users who downloaded the extension, supported by endorsements from prominent content creators including Linus Tech Tips, one of the largest tech channels on YouTube.

Behind the Scenes

However, a multi-year investigation has revealed concerning practices behind this seemingly helpful tool. The investigation uncovered three primary scenarios where the extension’s operations differed significantly from its marketed promises.

The first issue involves the extension’s interaction with affiliate marketing systems. When users click an influencer’s affiliate link and proceed to checkout, Honey would intervene by opening a discrete new tab, effectively replacing the original affiliate cookie with its own. This process essentially redirected commission payments from content creators to PayPal, even in cases where Honey provided no additional value to the transaction.

The second scenario involves “Honey Gold” (now PayPal Rewards), where the extension offers users points in exchange for allowing PayPal to claim the affiliate commission. In one documented case, a $35 commission was claimed by PayPal, with only 89 cents worth of points awarded to the user.

Control and Partnerships

Perhaps most significantly, the investigation revealed that Honey’s core promise of finding the best available coupon codes was compromised by its business partnerships. According to their own partner FAQ and public statements, partnering merchants were given control over which coupon codes appeared on the platform.

This created a paradoxical situation where Honey marketed itself to consumers as a tool for finding the best possible deals, while simultaneously appealing to businesses by promising to prevent consumers from finding better discounts elsewhere. The platform would often only display merchant-approved codes, even when better discounts were available through other channels.

Impact on the Creator Economy

The impact on content creators has been substantial. Even major channels like Linus Tech Tips, which produced approximately 160 sponsored segments for Honey reaching 194 million views, eventually discovered and ended their partnership due to the affiliate commission interference. However, these videos remain live on YouTube, continuing to drive installations of the extension.

The situation became serious enough to attract attention from the Better Business Bureau, which launched an inquiry into Honey’s advertising claims. The investigation was dropped after Honey discontinued certain claims for “business reasons.”

Broader Implications

The case raises important questions about transparency in digital marketing and the responsibility of tech companies to their users and partners. For content creators who rely on affiliate marketing income, the practices potentially resulted in significant lost revenue. For consumers, the promise of finding the best available deals was compromised by business partnerships that prioritized merchant control over user savings.

The investigation suggests that the familiar adage “if a product is free, you’re probably the product” may hold particularly true in this case, with both consumers and content creators potentially paying hidden costs for the convenience of a free browser extension.