Why Influencers Say Honey Is Stealing Their Money

Summary

Podcast Summary: The Journal – "Why Influencers Say Honey Is Stealing Their Money"

Episode Overview The Journal, a collaborative production by The Wall Street Journal and Gimlet, delves into critical stories surrounding money, business, and power. Hosted by Kate Linebaugh, Ryan Knutson, and Jessica Mendoza, this episode titled "Why Influencers Say Honey Is Stealing Their Money," released on February 20, 2025, explores the contentious relationship between online influencers and the browser extension service, Honey.

---

Introduction to the Controversy Jessica Mendoza opens the discussion by introducing a significant controversy involving Honey and its impact on YouTube creators' earnings.

Key Characters:

• Dylan Russell (Yub): A Texas-based YouTuber with 1.6 million subscribers who primarily earns through ad revenues and merchandise.
• Devin Stone (Legal Eagle): A lawyer and YouTuber with over 3.5 million subscribers, specializing in explaining legal matters related to current events and pop culture.

---

Honey’s Business Model and Partnership with Influencers Jessica Mendoza provides an overview of Honey, a browser extension launched in 2012, which assists users in finding promo codes and discounts across over 3,000 websites. Owned by PayPal since its acquisition in 2019 for approximately $4 billion, Honey generates revenue through commissions on facilitated purchases.

Notable Quote:

• Dylan Russell (Yub) [01:04]: “That's where I make probably 95% of my income. My eggs are definitely all in that basket.”

Honey’s partnership with influencers has been widespread, with notable YouTubers like Mr. Beast and PewDiePie promoting the service. Yub recounts his collaboration with Honey, highlighting how these sponsorships are integrated into his content.

Notable Quote:

• Dylan Russell (Yub) [07:02]: “Picture like there's a 15 minute long gaming video, and then five minutes in, I'm gonna be like, so sorry, gotta talk about the sponsor real quick.”

---

The Accusations Against Honey In December of the previous year, YouTuber Megalag released a video accusing Honey of deceitfully redirecting affiliate commissions away from creators. Megalag’s allegations suggest that Honey overrides the original affiliate links provided by creators, thereby capturing the commissions meant for them.

Notable Quote:

• Unnamed YouTuber [03:09]: “The Honey influencer scam turned out to be a big scam, allegedly. I can't believe it.”

Jessica Mendoza details how Honey’s actions contradict standard affiliate marketing practices, where the last click typically receives the commission. Honey claims that their actions provide value by ensuring shoppers receive the best prices, but this has been contested by numerous creators.

---

Investigative Findings and Demonstrations Jessica Mendoza and her producer, Alan Rodriguez Espinosa, conducted their own investigation by replicating the process described by Megalag. They found that Honey indeed replaced the original affiliate cookies with its own, thereby diverting potential commissions, even in the absence of additional discounts.

Notable Quote:

• Dylan Russell (Yub) [10:24]: “...Honey gets the credit for that sale. If it pops up and it's like, just so you know, there's no coupon codes on this site and you click okay, got it. They still take the affiliate link for that sale.”

These findings validate the concerns raised by multiple influencers, leading to widespread outrage within the YouTube community.

---

Legal Actions and Industry Response Devin Stone, known as Legal Eagle, spearheaded the legal battle against Honey by filing a class action lawsuit in California. The lawsuit alleges that Honey's practices constitute intentional interference with contractual relations and violation of consumer protection laws. Over 1,000 creators have expressed interest in joining the lawsuit.

Notable Quote:

• Devin Stone [21:33]: “I've got my sleeves rolled up. I've got my tie loosened. We're going at it.”

Other shopping extensions like Capital One Shopping and Microsoft Shopping have faced similar lawsuits, though they have publicly denied the allegations.

---

Industry Standards and Ethical Considerations Julie Van Allen, Chief Revenue Officer of Rakuten Rewards, explains the concept of "last click attribution," which is the standard method in affiliate marketing. This practice ensures that the final affiliate interacting with the consumer before a purchase receives the commission.

Notable Quote:

• Julie Van Allen [17:22]: “Last click attribution is the gold standard for measurement and affiliate.”

Van Allen emphasizes the importance of "standing down," a practice where once an affiliate link is clicked, other extensions or affiliates refrain from claiming the commission for that transaction. This mutual respect maintains the integrity of affiliate relationships and ensures creators receive their due credit.

---

Implications for the Affiliate Marketing Industry The controversy surrounding Honey has sparked a broader discussion about the ethical responsibilities of browser extensions and affiliate marketers. While some industry insiders question the ethics of overriding affiliate links, others argue that Honey is merely adhering to established industry practices.

Notable Quote:

• Devin Stone [15:02]: “We think it is violative of several different laws... they're taking advantage of that instead.”

The legal battles may set precedents that could reshape how affiliate marketing operates, potentially leading to more transparent and fair practices that prioritize creators' earnings.

---

Conclusion and Future Outlook As the lawsuits proceed, the outcome remains uncertain. Devin Stone expresses commitment to the long legal fight, aiming to restore rightful earnings to creators and uphold ethical standards within the industry.

Notable Quote:

• Devin Stone [21:35]: “Yes, well, for one thing, I think it's the right thing to do... it's money that should go back to the creators.”

The episode concludes with a reflection on the potential long-term impacts on both influencers and the broader affiliate marketing ecosystem, highlighting the ongoing struggle between creators and corporate practices.

---

Final Notes This episode of The Journal provides an in-depth examination of the friction between influencers and affiliate marketing platforms, using Honey's controversial practices as a case study. Through interviews, investigative reporting, and expert insights, listeners gain a comprehensive understanding of the complexities and stakes involved in the digital economy.

Transcript

[Jessica Mendoza]

I'm not someone who spends a lot of time on YouTube, but recently, a spicy controversy that has to do with how influencers make money had me on a call with a YouTuber.

[Dylan Russell]

I'm a YouTube creator. I go by the name Yub. I'm based in Texas. Hello, y'all. And I make gaming videos, very immature style, like the kind your kids probably watch on the iPad. That's so annoying. That's me. That's what I do.

[Jessica Mendoza]

And you probably get asked this a ton. Why Yub.

[Dylan Russell]

It was just the shortest URL I could find that was short, but you could still say it as a word out loud.

[Jessica Mendoza]

And it's not your real name, obviously.

[Dylan Russell]

No, no, my real name is Dylan. That would be crazy if my mom named me Yub.

[Jessica Mendoza]

Dylan Russell, aka Yub, has about 1.6 million subscribers on his channel, and he's been making a living entirely off YouTube for years. Most of his income comes from ad breaks in his videos.

[Dylan Russell]

That's where I make probably 95% of my income. My eggs are definitely all in that basket. And then I have a small portion that comes from merch sales. I have, like, little silly Yub T shirts and stuff and hats.

[Jessica Mendoza]

Another common way that Yub and other YouTube creators get paid is. Is through sponsorships, basically promoting products in their videos. One company that sponsored Yub was a service called Honey. In fact, Honey paid a lot of YouTubers to promote it.

[Devin Stone]

Do you have Honey installed?

[Unnamed YouTuber]

What's Honey? Oh, no, no, no.

[Devin Stone]

Honey is the free to use browser extension that helps you find the best promo codes at over 3,000 sites and.

[Unnamed Sponsor]

Automatically tests them while checking out during your online shopping.

[Unnamed YouTuber]

It is literally free money. You don't do anything extra.

[Jessica Mendoza]

It's free.

[Devin Stone]

It's completely free, and it take just two clicks to install.

[Jessica Mendoza]

Honey is owned by PayPal, the online payments company. And Honey's main thing is discount codes and coupons. You download the browser extension, and while you're shopping, you click on Honey's pop up and it looks for coupons for you from across the Internet. For years, Honey was a darling among YouTubers.

[Dylan Russell]

When they reached out to me, I was like, oh, cool. Because this is a legit brand, a big brand, too. And since I was a small creator, it was almost like a little starstruck. I was like, oh, Honey wants to get a deal with me. Amazing.

[Jessica Mendoza]

But late Last year, a YouTuber posted a video with some big accusations against Honey. He said the browser extension was misleading its customers and stealing from the very same creators it had sponsored in an email. PayPal disagreed with the allegations, and some in the e commerce business say that Honey is just playing by the industry's rules and that it's long been a standard that the last link clicked gets the credit and the cash. But the video ended up getting millions of views in just a few days, and outraged YouTube creators started sharing their reactions.

[Devin Stone]

We've gotta talk about this Honey situation you need to talk about. The Honey influencer scam turned out to.

[Unnamed YouTuber]

Be a big scam, allegedly. I can't believe it. I can't believe it.

[Jessica Mendoza]

Now Honey and other services like it are facing several lawsuits and this dispute is drawing scrutiny toward a multi billion dollar industry that helps drive how money gets made online. Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Thursday, February 20th. Coming up on the show, Whose money is it Honey?

[Unnamed Sponsor]

Do you own a business that's ready to thrive? It's time to let Intuit QuickBooks take things like unpaid invoices and tracking expenses off your plate so you can take things to the next level. Intuit QuickBooks is a powerful AI driven, all in one business platform that can help with day to day tasks like invoicing, expenses and taxes. QuickBooks can help you unlock the growth in your business so you can get back to enjoying your business. Manage and grow your business all in one place. Intuit QuickBooks your way to Money Money Movement services provided by Intuit Payments, Inc. Licensed as a money transmitter by the New York State Department of Financial Services.

This episode is brought to you by Indeed. When your fridge stops working, you don't sit around waiting for all your food to spoil. You find a solution. So why wait to hire the people your company desperately needs? Use Indeed's Sponsored Jobs to find great talent fast. It moves your job post at the top of the page so it's the first thing relevant candidates see when they start searching. And it truly does make a difference. Sponsored jobs receive 45% more applications than non sponsored jobs, according to Indeed data. Plus with sponsored jobs, there are no monthly subscriptions or long term contracts. You're only paying for results. There's no need to wait any longer. Speed up your hiring right now with Indeed. Listeners of this show will get a $75 sponsored job credit to get your jobs more visibility@ Indeed.com journal. That's Indeed.com journal right now and support the show by saying you heard about Indeed on this podcast. Indeed.com journal terms and conditions apply. Hiring Indeed is all you need.

[Jessica Mendoza]

Honey was launched in 2012 in Los Angeles. And basically it automates the process of searching for coupons. Online users who download Honey get a pop up, either offering them a bunch of coupon codes or or telling them that Honey didn't find any better deals. And Honey offers that service for free. The platform makes money through commissions from some online purchases. There's a bunch of other companies that do this too. Capital One, for example, has something called Capital One Shopping. You may have also heard of Karma or Microsoft Shopping or Rakuten Rewards. For a while though, it seemed like everyone was talking about Honey. Yub, the gaming YouTuber, says he first heard of Honey in 2016 or so when he started seeing other creators get sponsored. Even his mom started using it.

[Dylan Russell]

My mom pestering me about it. I installed it and I remember what I ordered because it was at Papa John's Pizza. And I mean, who doesn't love that? And it was like $5 and some odd off. I was like, this is great. Wait, mom, you're right. I just saved $5 on my pizza. I love this.

[Jessica Mendoza]

The rest of the Internet seemed to love honey too. By 2019, it had 17 million monthly active users. And later that year, PayPal acquired Honey for about 4, $4 billion. By then, Honey was working regularly with influencers, including some of the biggest names on YouTube, like Mr. Beast and PewDiePie. Yub says Honey paid him $800 to promote the brand in 2019. He made a second deal with them in 2021.

[Dylan Russell]

Picture like there's a 15 minute long gaming video, and then five minutes in, I'm gonna be like, so sorry, gotta talk about the sponsor real quick. I promise I'll make it fast. And then I talked about Honey for a minute and then it goes back to the video. So it's just like a commercial embedded in the video that they paid for.

[Jessica Mendoza]

Then fast forward a few years this past December, just before Christmas.

[Dylan Russell]

Yeah, I hate to break it to.

[Devin Stone]

You, but your favorite influencers sold you a lie. Honey is a scam.

[Jessica Mendoza]

A YouTuber named Megalag dropped a video full of bombshell allegations against Honey.

[Devin Stone]

I'm confident this might just be the biggest influencer scam of all time, which is insane.

[Jessica Mendoza]

Megalag accused Honey of taking money that should have gone to his fellow YouTubers. He alleged that Honey takes advantage of something called affiliate links. Affiliate links are a common way of making money on the Internet. Think about the links you see on a YouTube channel or a review site. If that link leads you to a product, that's probably an affiliate link. And if you buy that product the influencer or website gets a cut for helping to make the sale. The affiliate marketing industry is growing quickly. It's expected to hit $12 billion in the US this year and generate more than a billion dollars in revenue for social media creators on YouTube. These links are especially popular among creators who review products.

[Dylan Russell]

Let's say I was making a video about cameras. You can, if you have an agreement with the company, you get your little affiliate link. You copy paste it into the description of your video. And then if you're talking about the camera and people are like, you know what? I like that camera. I want to buy it. They scroll down and they click your link. And if they buy it, you get a kickback.

[Jessica Mendoza]

In his video, megalag showed Honey overriding the influencer's referral and replacing it with its own, in effect taking credit for the sale. He alleged that this happens even when Honey doesn't offer the customer any discounts. PayPal said it does offer value to its customers because it gives them a sense of confidence that they're already paying the best price. We tried to replicate what megalag did. Our producer, Alan Rodriguez Espinosa, and I downloaded Honey and then clicked on an affiliate link on a YouTuber's channel. So I'm gonna. I'm gonna hit that product link. Hit that affiliate link, and it goes to a VPN website, right?

[Unnamed YouTuber]

He's sponsored by a VPN company and he's promoting the company. And if you click on their affiliate link, you can sign up for the VPN and you get a discount on it. You get a promotion on it.

[Jessica Mendoza]

After the YouTuber's link took us to a new website, we pulled up the HTML code for that page and looked up the YouTuber's affiliate cookie. That's a piece of code that identifies the YouTuber as the person who sent us to that product page.

[Unnamed YouTuber]

I'm in. I'm in the system.

[Jessica Mendoza]

We're in the system. And just like in megalag's video, when we got to checkout and we clicked on the Honey extension. Oh, where'd he go? The cookie associated with the YouTuber disappeared and was replaced with a cookie associated with Honey. We tried this a few times, and it happened even when there wasn't cash back or a better coupon available. That's the part that got YouTubers heated. Yub, who had promoted Honey in the past, says the whole thing felt icky.

[Dylan Russell]

If you click anything on that little window other than the X to close it, Honey gets the credit for that sale. If it pops up and it's like, just so you know, there's no coupon codes on this site and you click okay, got it. They still take the affiliate link for that sale. So that's where it starts to feel real slimy, real quick to me. Very misleading. They're just straight up tricking people into not supporting the creator that they intended to support. That sucks, especially since a lot of the people who are going to be hit the hardest by the affiliate link thing are going to be small creators who need that kickback on that sale more than I would, so that really sucks for them.

[Jessica Mendoza]

PayPal said that honey returns to shoppers a large chunk of the commissions it makes as cashback rewards. The company also said Honey cuts back on cart abandonment, which is when a shopper fills up their cart but never actually completes the sale. As megalag's video made the rounds, it came across the screen of another YouTube creator and he decided that he wouldn't just make a video. Reacting to the accusations like so many other YouTubers did, he was going to go a step further.

[Devin Stone]

So on behalf of creators everywhere, I have filed a class action lawsuit to stop it.

[Jessica Mendoza]

After the break, Honey gets taken to court.

[Unnamed Sponsor]

Foreign.

This episode is brought to you by Global X. Since 2008, Global X ETFs has been committed to empowering investors with unexplored intelligence solutions. Global X specializes in exchange traded funds that offer exposure to the artificial intelligence ecosystem, including themes like data centers, robotics, semiconductors and cloud computing. To learn more about Global X's entire suite of ETFs from covered calls, fixed income, emerging markets and more, visit globalxetf's.com this episode is brought to you by Amazon Business. We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn [e-mail].

[Jessica Mendoza]

So you are a real lawyer. You're not just one who plays aLawyer on YouTube.

[Devin Stone]

I am a real lawyer. I don't just play one on tv. I'm actually barred in California, New York, Washington, dc, Virginia and Maryland. So my bar dues are quite heavy every year.

[Jessica Mendoza]

That's Devin stone, known on YouTube as Legal Eagle. Devin has more than 3.5 million subscribers to his channel. His whole thing is breaking down law in news, in current events, and in pop culture. Do you have a favorite video you've ever made?

[Devin Stone]

Probably my favorite video that I've ever done was explaining how accurate the movie my cousin Vinnie is.

[Jessica Mendoza]

Did you Say utes.

[Devin Stone]

Yeah, two utes.

[Julie Van Allen]

What is a ute?

[Jessica Mendoza]

Oh, excuse me, your honor.

[Julie Van Allen]

Two youths.

[Devin Stone]

The movie My Cousin Vinnie is actually a darling among lawyers because it is so accurate.

[Jessica Mendoza]

Yeah, I've heard that.

[Devin Stone]

It's not only accurate, but it also shows a lot of the best practices that trial lawyers, you know, spend their whole careers trying to learn as a.

[Jessica Mendoza]

Lawyer and a creator. Devin was very interested in the Honey accusations, even though he says he'd never worked with Honey himself. What was your first thought when you saw what Honey was being accused of doing?

[Devin Stone]

I basically jumped out of my seat that in retrospect, what megalag accused Honey of doing seems so simple but also so brazen, that I was shocked that any company would actually engage in the kind of actions that they were accused of.

[Jessica Mendoza]

Devin, along with a team of other lawyers, kicked off the new year by filing a class action suit in a district court in California where PayPal is based. The lawsuit names five different YouTube creators, but Devin says he's had over 1,000 other people reach out to join the class action. What's the legal basis for this case? What are you saying Honey should not be doing under the law?

[Devin Stone]

What we think Honey is doing is interjecting itself and replacing or stealing affiliate commissions from creators that sent traffic to an online store. So all of those benefits that would have gone to the original referral source, therefore go to Honey, honey, PayPal instead. We think it is violative of several different laws. One is a cause of action called intentional interference with contractual relations. So there's a contract between these brands and the creator or the influencer, and Honey is interfering with that contract. And we also think that it is violative of a lot of consumer and industry protection laws. And basically, we allege they're taking money that would have gone to the people who are actually responsible for sending traffic and sending customers and creating value. And instead they are. They're taking advantage of that instead.

[Jessica Mendoza]

PayPal said, quote, we disagree with the claims in these lawsuits and look forward to defending ourselves. After Devin filed his lawsuit against Honey, others quickly followed. A few of those cases, including Devin's, have since been consolidated into one big class action suit. And litigation has spread beyond Honey to other shopping extensions. Capital One Shopping and Microsoft Shopping have also been sued for similar allegations. Capital One said via email, quote, we disagree with the premise of the complaints and look forward to defending ourselves in court. Microsoft said that they're reviewing the complaint, but believe that the claims are without merit and that their service provides shoppers with benefits and follows common industry Standards. Those industry standards are at the root of the conflict here. I spoke to several industry insiders in the affiliate marketing world, and to varying degrees, they questioned the ethics of these browser extensions swapping out referrals. But is it unlawful or just not cool? Because in the affiliate marketing business, giving credit to the last referral that a user clicks is just common practice forever and ever.

[Julie Van Allen]

It has been the standard in affiliate measurement for a great many years. That credit is rewarded to the publisher who was the last click in that transaction. That is called last click attribution.

[Jessica Mendoza]

That's Julie Van Allen, the chief revenue officer of Rakuten Rewards, another shopping extension.

[Julie Van Allen]

Last click attribution is the gold standard for measurement and affiliate. What that means is that the final click that that consumer makes, the final affiliate that is engaged with before that consumer makes their purchase is the one who will get credited for that purchase.

[Jessica Mendoza]

The industry considers last click attribution as the most straightforward way to track who led a customer to a sale and pay them for it. But it's not a flawless system. Sometimes there are several different actors pushing customers toward a sale and it can be unclear who really deserves the commission. And that's why Julie says the industry has another common practice to prevent people from taking advantage of last click attribution.

[Julie Van Allen]

And this is what's known as standing down. That means that if you clicked your Rakuten Rewards cash back offer that all other affiliates who might have a browser extension, let's say installed, have a technology to know that they will not pop up an offer for the remainder of that consumer's session. It is an understanding and a nod to the fact that the consumer has made a choice and now we all need to accept that choice and let the consumer complete their transaction.

[Jessica Mendoza]

In other words, Julie is saying that browser extensions and other affiliate marketers can identify when someone else should get credit for a potential sale. So if a customer clicks on one browser extension, the rest can opt to stand down. The same policy could apply when influencers or anyone else leads customers to a purchase.

[Julie Van Allen]

Creators who are utilizing affiliate models, meaning commission models in order to drive their business, are tracked through the same affiliate networks that a loyalty publisher would be tracked through. And those technologies are equally capable of standing down off of an influencer referral link as they are from another browser extension link.

[Jessica Mendoza]

So one of the main allegations facing PayPal Honey is that by taking commissions, when consumers click on their pop ups, they're taking money that should have gone to creators. That is the allegation. What do you make of that?

[Julie Van Allen]

While I can't comment on specific business practices or alleged behavior. Again, I will point to the criticality of ensuring stand down practices. If every affiliate publisher continues to follow the gold standard of standing down and respecting the choice that the consumer has made, we will always ensure that the affiliate who deserves credit gets credit and that the consumer experience is transparent and they know that the influencer that they love is getting paid for the transaction that they make.

[Jessica Mendoza]

After that recommendation for stand down policies to really be effective, the affiliate industry needs to play ball, from publishers to networks to advertisers. But standing down is not a law. And that's the challenge for creators who are suing Honey and these other shopping extensions. As one advertising lawyer told the Journal, those lawsuits have to prove that those platforms were actually doing something unlawful and that creators were entitled to that money. He says that could be a difficult premise to prove. Still, Devin or Legal Eagle says he's in it for the long haul. How long could all this take?

[Devin Stone]

It could take years. We expect that Honey PayPal will fight this with everything that they have and a class action in general can take many years to take it to verdict. And we expect that this is going to be a knockdown, drag out fight.

[Jessica Mendoza]

Why? Do you think it's worth that effort?

[Devin Stone]

Yeah, well, for one thing, I think it's the right thing to do. But number two, as we've discussed, there is an enormous amount of money at issue here. And it's money that I think should go back to the creators. And these are often middle class people who are providing value to their audiences effectively for free. You know, you can watch YouTube or scroll through Instagram or TikTok and you don't have to pay anything. And these creators rely on the income that they're generated. And what's really interesting is that affiliate links in particular tend to be used by a lot of the smaller creators who haven't yet been able to create a brand deal or a sponsorship. And as a result, the kind of revenue that is being, we think, siphoned away is exactly the kind of stuff that would help more creators do more art. And we're talking hundreds of thousands of creators who might have been affected here.

[Jessica Mendoza]

So you've got your sleeves rolled up for this one.

[Devin Stone]

Got my sleeves rolled up. I've got my tie loosened. We're going at it.

[Jessica Mendoza]

That's all for today. Thursday, February 20 the Journal is a co production of Spotify and the Wall Street Journal. This episode was reported by me and Alan Rodriguez Espinosa with help from Angel Au Young Megan Graham and Peter Rudiger. Thanks for listening. See you tomorrow.