The online payment platform, PayPal, purchased a browser extension called Honey in 2019. This extension is designed to automatically apply coupons at checkout points for online shoppers. However, this acquisition has raised eyebrows, particularly among retailers who were previously unaware of the software's functionalities, leading to some contentious debates.
Honey operates by using a method known as 'affiliate marketing.' When a customer makes a purchase using a Honey-found coupon, the retailer pays an affiliate fee. This fee is then split between Honey and the affiliate network that tracked the deal. It is a business model that has been around for years, and is utilized by many cashback and coupon sites.
However, the controversy surrounds the fact that some retailers were unaware that Honey was operating in this way, leading them to pay affiliate fees they didn’t anticipate. It has been argued that Honey is essentially acting as a 'megalag,' a term used to describe the practice of inserting an affiliate link at the last moment possible, which may not be welcomed by all retailers. While Honey does not consider their practice as such, some retailers have chosen to disable Honey's ability to use their coupons.
It's worth noting that Honey's practices are not illegal, and they're not the only company operating in this way. However, the lack of transparency has caused some level of concern among retailers. Some argue that it is an inevitable side effect of the e-commerce and the affiliate marketing industry, while others believe that companies should be more upfront about their practices.
Regardless, the PayPal acquisition has brought significant attention to Honey and its methods. It's clear that the conversation around affiliate marketing, transparency, and the role of browser extensions in e-commerce is far from over. For consumers, however, Honey still offers a chance to save money on online purchases, which may outweigh any controversy surrounding its business model.