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Short answer: PayPal Honey is accused in federal litigation of overwriting affiliate-tracking information near checkout, potentially diverting commissions from creators whose links originally brought shoppers to a merchant. PayPal disputes the allegations and says Honey follows common last-click attribution practices. On June 22, 2026, a federal judge allowed the revised lawsuit to proceed, but that was not a finding that Honey broke the law.
The dispute primarily concerns who receives credit for a sale, not evidence that Honey universally charged shoppers higher prices. Consumers may nevertheless care about the allegations because they involve disclosure, shopping-data collection, browser permissions and whether a shopper’s purchase supports the creator whose link they used.
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What Honey is accused of doing
Honey is a free, PayPal-owned browser extension that promotes automatic coupon testing and other shopping features. Its official help page says it searches for and tests available codes at checkout, operates across more than 30,000 stores, can compare some Amazon prices and offers PayPal Rewards on eligible purchases.
The controversy began publicly after MegaLag published an investigation on December 21, 2024. The investigation reported tests suggesting that Honey could replace or alter affiliate attribution after a shopper arrived through a creator’s link. A subsequent creator lawsuit cited those allegations and claimed that Honey could take credit for a transaction even when it found no usable coupon.
Those reports and the lawsuits are evidence of allegations—not final proof. The technical behavior, the contracts governing affiliate payments, the amount of any lost commissions and the legality of the conduct remain disputed.
How affiliate links normally work
Affiliate marketing is a tracking system that lets a creator earn a commission when an audience member purchases from a merchant.
- A viewer clicks a creator’s unique affiliate link.
- The merchant or affiliate network stores a tracking identifier, often in a cookie or related browser storage.
- If the viewer completes an eligible purchase, the creator may receive a commission.
- Another affiliate interaction can change which participant receives credit, depending on the merchant’s rules.
A common model is last-click attribution, in which the last qualifying affiliate interaction receives the commission. Other programs use multi-touch attribution, coupon-specific rules or commission-sharing arrangements.
Last-click attribution is not automatically illegal. The central dispute is whether Honey merely participated in an authorized final affiliate interaction—or allegedly created or manipulated that interaction without adequate disclosure.
The plaintiffs’ theory is that Honey could delete or replace a creator’s affiliate identifier with its own, making the completed transaction appear attributable to Honey. The complaint also refers to a concealed “Secret Tab” and alleges that Honey could initiate the attribution process near checkout.
What MegaLag reported
MegaLag’s investigation examined whether Honey changed attribution after a shopper reached a merchant through an influencer’s link. The reported testing explored several questions:
- Whether attribution changed after a shopper interacted with Honey at checkout.
- Whether the change occurred when Honey found no usable coupon.
- Whether selecting “Apply Coupon,” dismissing a prompt or otherwise interacting with the extension triggered a new affiliate event.
- Whether the shopper received a meaningful saving or reward in exchange.
- Whether the creator lost the full commission, shared it or simply lost priority under the merchant’s attribution rules.
The original creator complaint describes the investigation as part of the basis for its claims. It does not turn the video’s conclusions into an adjudicated court finding. Reproducing a particular result can also depend on the retailer, affiliate network, cookie duration, browser, account status and transaction terms.
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What the lawsuits allege
The consolidated litigation alleges that PayPal and Honey:
- destroyed or replaced creators’ affiliate IDs;
- redirected commissions to PayPal or Honey;
- used hidden or “Secret Tab” behavior to affect attribution;
- failed to clearly disclose that Honey could claim affiliate credit;
- caused economic losses to creators and affiliate marketers; and
- violated computer-access, privacy, consumer-protection, unfair-competition, conversion, unjust-enrichment and interference laws.
The original complaint, filed in January 2025, included claims under the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California statutes, conversion, unjust enrichment and interference with prospective economic advantage. The second amended complaint, filed January 5, 2026, revised the case and added specific allegations about merchant and affiliate-program contract provisions.
In practical terms, plaintiffs must eventually connect the alleged technical conduct to legally protected rights and measurable losses. A decline in a creator’s affiliate revenue alone does not prove that Honey caused it. Sales may be rejected, reversed, delayed or attributed differently under a merchant’s program rules.
What the court has—and has not—decided
The November 2025 dismissal
On November 21, 2025, the court dismissed the first amended complaint and allowed the plaintiffs to amend. The court found the earlier pleading insufficient in part because of standing and concrete-injury problems. That ruling is why some older coverage may say the case was dismissed.
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The June 2026 ruling
On June 22, 2026, the U.S. District Court for the Northern District of California denied PayPal’s motion to dismiss the second amended complaint. The order allowed the revised allegations to proceed beyond the pleading stage.
The court found that the amended allegations plausibly supported claims that:
- some creators had contractual rights to commissions under particular affiliate arrangements;
- replacing their identifiers could correspond to lost revenue;
- the alleged conduct could qualify as damage or loss under the legal theories pleaded;
- Honey’s broad browser permissions did not automatically settle whether consumers authorized modification of another party’s affiliate identifier; and
- the Washington consumer-protection claim could proceed at this stage.
That is a significant procedural development, but it is not a verdict. The court did not establish that Honey redirected every commission, that every user was affected, that the conduct was unlawful or that the plaintiffs will recover damages.
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PayPal’s response
PayPal disputes the lawsuits and has said Honey follows industry practices, including last-click attribution. In comments reported by The Washington Post, PayPal said it disagrees with the claims and would defend itself in court.
PayPal’s arguments, as reflected in the litigation and public reporting, include that:
- users knowingly installed Honey and granted it browser permissions;
- users actively interacted with the extension during checkout;
- merchants may have authorized Honey’s participation in their affiliate programs;
- last-click attribution may be expressly permitted by merchant contracts;
- the first creator link may not have an exclusive right to the commission;
- the alleged activity may be ordinary attribution rather than theft; and
- plaintiffs may ultimately be unable to prove causation, damages or a common injury affecting a class of users.
The court considered the permission issue at the motion-to-dismiss stage. PayPal argued that users willingly downloaded Honey, granted permissions and used it during transactions. Plaintiffs countered that a general browser permission did not amount to real-time authorization to alter someone else’s affiliate identifier or to insert a hidden tab. That disagreement remains unresolved.
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Were shoppers charged more?
There is no established finding in the supplied court materials that Honey universally increased shoppers’ prices. The principal claimed financial injury is to affiliate marketers whose commissions may have been redirected.
A shopper using Honey might receive no coupon, a coupon that was already available elsewhere, a small reward or a genuine discount. The alleged consumer concerns are different:
- the shopper may have believed Honey was only searching for discounts;
- the shopper may not have understood that Honey could claim affiliate credit;
- the shopper may have intended to support a particular creator; and
- the shopper’s shopping and transaction information may be collected and used under Honey’s privacy terms.
Honey’s U.S. privacy statement says it may collect retailer names, website domains, page views, product information, transaction values, completed or returned orders, shopping history, merchant preferences, IP addresses and inferred shopping preferences. It says this information may be used for analytics, commission collection, rewards, personalization and sponsored offers. That disclosure is relevant context, but it does not itself prove that the affiliate allegations occurred or were unlawful.
How Honey currently describes the product
Honey’s official product description, updated April 20, 2026, says the extension tests available coupon codes and applies the code producing the largest saving it finds. It also advertises PayPal Rewards on eligible purchases, Amazon price comparisons and support for Chrome, Firefox, Safari, Opera and Edge.
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For U.S. users, Honey says 1,000 points can be redeemed for a $10 gift card from participating stores, or used through PayPal checkout. Rewards are not offered on every supported retailer or every transaction. These are Honey’s product claims and program terms—not an independent guarantee that it will always find the best price or coupon.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What consumers should do
1. Decide whether the trade-off works for you
Keeping Honey may be reasonable for someone who values automatic coupon testing and eligible rewards. Removing it may make more sense if you prioritize creator attribution, limit shopping-data collection or do not want an extension interacting with checkout pages.
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Removing Honey is a preference and risk-management decision, not an admission that a past transaction was affected. Private browsing, deleted cookies, multiple browsers, mobile apps and logged-in shopping accounts can all make attribution difficult to reconstruct.
2. Uninstall the extension
Honey provides browser-specific instructions for uninstalling the extension. The general desktop process is:
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- Firefox: open Add-ons and Themes, select Extensions, choose Honey and remove it.
- Edge: open Extensions, choose Manage extensions, find Honey and remove it.
- Opera: open the extensions manager and remove Honey.
- Safari on Mac: open Safari settings or preferences, select Extensions and uninstall Honey.
Browser labels can change, so use Honey’s current support page if your menu looks different. Removing the extension does not automatically delete an account or erase previously collected information.
3. Review account and privacy controls
Honey’s U.S. privacy notice says users can adjust settings, opt out of rewards, uninstall the extension, delete their account or request deletion of personal information by contacting [email protected]. Honey also says some information may be retained for legal, compliance or litigation-defense purposes, and aggregated or anonymized information may remain.
4. Preserve records if a purchase matters
If you believe a purchase should have supported a creator, save:
- the creator’s link and the merchant URL;
- the purchase receipt and order number;
- dates and approximate times;
- screenshots of any Honey coupon, reward or checkout prompt;
- affiliate-dashboard records; and
- information showing whether Honey was enabled.
Do not assume that a missing commission proves diversion. Affiliate networks can delay, reject, reverse or reclassify transactions. Uninstalling Honey will not restore a past commission automatically.
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Creators should compare affiliate-network reports by merchant, date, device and traffic source, looking for patterns rather than treating a single missing transaction as proof. Useful records include:
- conversion and approved-commission rates before and after Honey became common among the audience;
- transactions involving coupon pages or browser-extension traffic;
- merchant contracts defining last click, coupon affiliates, toolbar affiliates and prohibited overwriting;
- whether the merchant permits commission sharing; and
- cookie duration, reversal and attribution rules for each program.
Important failure modes include counting gross sales instead of approved commissions, ignoring merchant-specific rules, failing to preserve records before dashboards expire and confusing a missing commission with a commission redirected to Honey.
Creators considering legal action should preserve evidence and obtain advice from a qualified attorney. General online checklists cannot determine whether a particular transaction supports a claim.
Where the case stands now
As of August 18, 2026, Honey remains a functioning coupon-and-rewards service, while the affiliate-attribution controversy remains active litigation. The June ruling means the revised claims were sufficiently plausible to continue. It does not resolve liability, damages, class certification or the technical and contractual disputes at the heart of the case.
The most accurate description is therefore narrower than “Honey ripped off everyone.” Plaintiffs allege that Honey interfered with affiliate attribution and diverted commissions in some circumstances. PayPal says the service used disclosed, industry-standard last-click practices. The court has allowed the allegations to be tested through further litigation, but has not decided who is right.
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