What the Honey scandal cost merchants, and how to check your store
Creators sued Honey, but merchants paid the commission and the leaked codes. Where the case stands, what networks did, and how to check your own store.
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In short
It's mid-October. You're building the Black Friday commission plan, deciding which partners get a peak-week rate bump. Honey is still a publisher in your programme on one network; another cut it in January.
Your founder forwards a MegaLag video with one line: "Are we paying for this?" You've followed the Honey scandal and the Honey lawsuit, but you can't say which orders the extension started, which it joined at the end, or which of your codes it shows.
This guide covers what happened from the merchant's side, where the case stands in October 2026, what each network did, and the checks to run on your store before peak.
What happened, from a merchant's side?#
In December 2024, YouTuber MegaLag alleged that PayPal's Honey extension took the last click and commission on sales other partners sent, and showed shoppers codes merchants never meant to publish. Creators sued; as of 17 October 2026, no court has found liability. [MegaLag (YouTube), Dec 2024] (opens the source)[US District Court, N.D. California, Jun 2026] (opens the source)[US District Court, N.D. California (docket), Dec 2024] (opens the source)
Under last-click attribution, credit is all-or-nothing: the final credited affiliate gets the commission. The creators' complaint, as described in the court's June 2026 order, alleges that a hidden pop-under tab replaced the existing affiliate ID. It also alleges that Honey followed stand-down rules, which protect an earlier referrer, only when it detected a network tester or network auditor. [US District Court, N.D. California, Jun 2026] (opens the source)
Your own test could therefore have given you a different answer from your shopper's visit. Researcher Benjamin Edelman's December 2025 analysis found that Honey's tester criteria included a merchant's affiliate manager. His January 2026 update reported that VPT, the affiliate compliance firm where he is chief scientist, had 401 videos of Honey stand-down violations at 119 merchants. [Benjamin Edelman, Dec 2025] (opens the source)
PayPal told Hello Partner on 15 January 2026 that the code predated its acquisition, affected less than 0.1% of Honey's traffic and had been switched off. [Hello Partner, Jan 2026] (opens the source) In his August 2026 video, MegaLag called that figure misleading without more context. [MegaLag (YouTube), Aug 2026] (opens the source)
The codes have a separate route. Honey's business FAQ says merchants control the content and asks partners for a HONEY code so "there will always be a code available". Its privacy statement lists "coupons, promo codes, and deals you found" among collected data; its terms take a perpetual licence to user-submitted codes. [Honey (PayPal), Oct 2026] (opens the source)[PayPal, Oct 2025] (opens the source)[Honey Science LLC, Feb 2024] (opens the source)
In his December 2025 follow-up, reported by PPC Land, MegaLag alleged codes were collected before users consented. The report describes Made In CEO Chip Malt asking for removal after a private employee code leaked. Honey replied that removal was typically for partners, then said it couldn't disable individual stores. The investigation disputes that claim. [PPC Land, Dec 2025] (opens the source)
Chrome began enforcing its affiliate-ads policy on 10 June 2025: extensions must not insert an affiliate link when no coupon or discount is found. The policy requires a transparent benefit and related user action, but doesn't require stand-down for earlier affiliates. Your programme's crediting rules still matter. [Chrome for Developers, Mar 2025] (opens the source)[Chrome for Developers, Mar 2025] (opens the source)
Who paid for it: creators or merchants?#
The plaintiffs are creators, but merchants paid both bills: commission on credited orders and the discount when a private code was redeemed by another shopper. Whether those costs bought additional sales is the question your own data has to answer.
2%
of conversions credited to Honey were originated by Honey across PartnerCentric's client programmes in Q4 2024, against a 13% average for coupon, loyalty and cashback partners.
PartnerCentric sells the measurement tool behind that analysis. "Started" means the partner began the session journey; it doesn't tell you whether the order would have happened without it. [PartnerCentric, Feb 2025] (opens the source)
Haus tested a different question at one global DTC brand in 2023: loyalty affiliates were switched off in the US for seven weeks, against comparable regions, with no change in revenue. Haus sells incrementality testing. That result warrants a test on your store, rather than a conclusion about every partner. [Haus, May 2023] (opens the source)
The sums are large across the channel. Cashback, loyalty and rewards publishers took 35% of US affiliate spend in the Performance Marketing Association's 2025 industry study, which covered 2024; the trade body puts total spend at $13.62 billion. Almost 80% of respondents to its 2026 US brand survey, which polled in-house managers, agencies and networks, still used last click. [Affiverse (PMA study), Jun 2025] (opens the source)[Performance Marketing Association, Jun 2025] (opens the source)[Performance Marketing Association, Jul 2026] (opens the source)
Your discount bill needs its own check. Anyday founder Steph Chen told Modern Retail in May 2024 that Honey still picked up leaked codes despite Shopify usage limits, calling the margin effect "a double whammy". [Modern Retail, May 2024] (opens the source)
CJ's 2023 study with Namogoo says extension users spend more, but that comparison is correlational and CJ earns on those commissions. PayPal said in January 2025 that Honey follows industry rules, including last click. In 2024, P.F. Candle Co. chose a direct Honey partnership for more control over codes. The useful question for your renewal is which orders the partner starts. [CJ and Namogoo, Nov 2023] (opens the source)[Marketing Brew, Jan 2025] (opens the source)[Modern Retail, May 2024] (opens the source)
Where does the lawsuit stand in October 2026?#
It's still going. On 22 June 2026, the court denied PayPal's motion to dismiss the creators' second amended complaint; class certification is scheduled for a hearing on 11 February 2027 or later, and a jury trial is set to begin on 18 October 2027. [US District Court, N.D. California, Jun 2026] (opens the source)[US District Court, N.D. California (docket), Dec 2024] (opens the source)
If you're following the Honey lawsuit through older headlines, distinguish dismissal with leave to amend from the end of a case.
| Date | What happened | What it means for a merchant |
|---|---|---|
| 21 Dec 2024 | MegaLag published the first video. [MegaLag (YouTube), Dec 2024] (opens the source) | The allegations became public. |
| 29 Dec 2024 | Wendover Productions and Businessing filed the first complaint. LegalEagle's Devin Stone was counsel, not a plaintiff. [US District Court, N.D. California (docket), Dec 2024] (opens the source)[Plaintiffs' counsel, N.D. California, Jan 2025] (opens the source) | This is the creator case. |
| 7 Nov 2025 | PayPal's arbitration motion was denied. [US District Court, N.D. California (docket), Dec 2024] (opens the source) | The case stayed in court. |
| 21 Nov 2025 | First amended complaint dismissed for standing, with leave to amend. [US District Court, N.D. California, Nov 2025] (opens the source) | Plaintiffs could try again. |
| 5 Jan 2026 | Second amended complaint filed. [US District Court, N.D. California (docket), Dec 2024] (opens the source) | The allegations were revised. |
| 22 Jun 2026 | Motion to dismiss denied. [US District Court, N.D. California, Jun 2026] (opens the source) | The claims could proceed. |
| 16 Jul 2026 | PayPal answered. [US District Court, N.D. California (docket), Dec 2024] (opens the source) | It denies wrongdoing. |
| 7 Oct 2026 | Class certification motion was due. [US District Court, N.D. California (docket), Dec 2024] (opens the source) | A deadline, not confirmation of filing. |
| 11 Feb 2027 | Certification hearing, or later. [US District Court, N.D. California (docket), Dec 2024] (opens the source) | No class is certified today. |
| 18 Oct 2027 | Jury trial scheduled to begin. [US District Court, N.D. California (docket), Dec 2024] (opens the source) | Your peak-season decisions come first. |
The separate Campbell case concerned UK residents' claims about "best deals". It was dismissed with prejudice on 15 June 2026; an appeal was docketed at the Ninth Circuit on 15 July. PayPal's counsel Orrick announced that win on 18 June, four days before the creator case survived. [US District Court, N.D. California, Jun 2026] (opens the source)[Orrick (PayPal's counsel), Jun 2026] (opens the source)
The US consumer case, White with Fitzgerald consolidated, alleges Honey favours partner merchants' codes. Four named plaintiffs' claims were dismissed for standing with leave to amend on 31 August 2026 (others are in arbitration or on appeal), and an amended complaint followed on 5 October. That is another case again. [US District Court, N.D. California, Aug 2026] (opens the source)
For your store, the proposed creator-case class is US affiliate marketers, not merchants. No class has been certified, there's no settlement or claims process, and no merchant or affiliate network is a party to these cases. You can't budget for a recovery through that proposed class. [US District Court, N.D. California (docket), Dec 2024] (opens the source)
Which networks acted, and is the extension still on your store?#
Three networks acted publicly in January 2026, one reportedly let Honey back, and the extension still runs on Chrome for 13 million users. Your store's position depends on each programme you run. [PPC Land, Jan 2026] (opens the source)[PPC Land, May 2026] (opens the source)[Chrome Web Store, Oct 2026] (opens the source)
Rakuten Advertising removed Honey on 12 January 2026. PPC Land reported reinstatement in May, after Rakuten Rewards published an open-source stand-down SDK. Rakuten hasn't confirmed the reinstatement. [Hello Partner, Jan 2026] (opens the source)[PPC Land, May 2026] (opens the source)[Rakuten Rewards (GitHub), Oct 2026] (opens the source)
impact.com suspended Honey's account and removed it from Discovery on 16–17 January. Awin's 21 January statement confirmed publisher-policy breaches, suspended payments and access to new programmes, and said Honey had offered to fund and support policies letting advertisers remove unauthorised or invalid codes. Those are dated actions, not confirmation of today's account status. [PPC Land, Jan 2026] (opens the source)[Awin Group, Jan 2026] (opens the source)
As of 17 October 2026, we found no public action from CJ, Partnerize or Webgains. Check your programme rather than treating that as evidence of compliance.
13M
Chrome users shown on Honey's listing on 17 October 2026. The listing was updated on 2 October 2026.
That compares with 20 million Chrome users before the first video, in a December 2024 snapshot. These are rounded Chrome counts, not membership across every browser. [Internet Archive, Dec 2024] (opens the source)
Honey's affiliate-partnered stores fell from about 35,000 in December 2024 to just above 28,000 in August 2026, according to third-party tracking presented in MegaLag's August 2026 video and reported by PPC Land. The count doesn't show whether a network or the merchant ended each partnership. [PPC Land, Aug 2026] (opens the source)
A network removal stops commission through that network. It doesn't remove the extension from your shoppers' browsers or your codes from its list, so your finance and code checks remain separate jobs.
How do you check what the extension does on your store?#
Check what shoppers see, which codes are available, and who receives credit, then test whether changing the arrangement affects sales. Give your affiliate manager the network checks and your ecommerce lead the code list before you approve peak rates.
1. Look your store up the way a shopper would. Open your store's joinhoney.com page and run the extension at your checkout in a fresh browser profile. Record what you see. The catch: you've seen what that browser gets, not the full code list.
2. Check which of your codes the extensions already hold. Use the free code check, then compare the results with codes you intended to publish. The catch: a code that's out stays out; limits and replacements are the next job, covered in stopping discount code leaks.
3. Ask for removals through published routes. Partners can contact their Honey partnerships team or [email protected]; the business FAQ invites requests for codes not meant for public distribution. Its Shopify FAQ lets app users choose shared codes, but directs removal of user-generated codes to [email protected]. Awin says Honey offered to fund and support code-removal policies for its advertisers; ask your Awin contact whether they're in place. [Honey (PayPal), Oct 2026] (opens the source)[Honey (PayPal), Oct 2026] (opens the source)[Awin Group, Jan 2026] (opens the source) The catch: Made In was told removal was typically for partners; the Shopify app requires sharing at least one code. Removal from a list doesn't invalidate a code someone already has. [PPC Land, Dec 2025] (opens the source) The guide to controlling Honey on Shopify covers storefront and checkout controls.
4. Test stand-down the way a shopper would. Use a browser without your network-dashboard login and an established account. Click your own affiliate link first, run the extension at checkout, then check which publisher your network credits. Edelman's finding that affiliate managers counted as testers explains why your working browser could mislead you. [Benjamin Edelman, Dec 2025] (opens the source) The catch: one order is one sample, and PayPal says the detection code is switched off. [Hello Partner, Jan 2026] (opens the source)
5. Read the extension's line on each network before peak. Is it active in your programme, what did it earn last quarter, and what rate does it get? Honey's FAQ requires an effective commission rate of at least 5% to enable Honey Gold, its points bonus. [Honey (PayPal), Oct 2026] (opens the source) Review your affiliate agreement terms for coupon publishers and stand-down, before the peak-week bump and your code freeze. The catch: status moves, as Rakuten illustrates, and programme removal stops commission rather than the extension.
6. Measure which orders it starts. Run a holdout: a randomly chosen slice of eligible shoppers keeps the existing experience while others get the change. Use holdout measurement and testing a cashback partner before renewal to agree the result finance will read. The catch: small stores need weeks of traffic; a November start won't give you a read before Cyber Monday.
If you run creator codes, check how to set up codes and links so credit survives.
For the merchant-side emails, watch MegaLag's second video, published on 22 December 2025. [MegaLag (YouTube), Dec 2025] (opens the source)
How Benson shows what an extension does on your store#
Benson connects the session, code and attribution checks so you can decide on your own store's evidence. The Free plan includes extension detection and observe mode: which coupon extensions your shoppers run, in which sessions, and what Benson would hide. Observe mode changes nothing on your store.
The Checkout rules page lists codes used most in coupon-extension sessions. Code watch shows whether a leaked code is contained, replaced, or whether its replacement is spreading, so you can follow the code after your removal request.
On Stop and above, attribution integrity records the affiliate ID, click ID or UTM source your shopper arrived with. It covers affiliate click IDs from Awin, impact.com and CJ, UTM tags, the ref parameter and first-party affiliate cookies you list. When credit changes after the cart, Benson records the overwrite, shows any extension detected in that session and estimates the commission moved at your rates, with alerts and a network report.
Partner deals records your agreement with an extension partner and shows how often it joins after the cart. Your affiliate manager can keep, renegotiate or cut the deal using the partner deal playbook.
The strict code policy, on Stop and above, accepts only allowlisted codes in coupon-extension sessions; other codes get a short message instead of a discount. Customers without an extension who type the code you sent still get it. On Shopify, no app can change what an extension shows inside checkout, so protection there works on the codes.
Block, on Stop and above, hides extension pop-ups by rule on your storefront: home, product, collection, search and cart pages, plus the cart drawer. Every control can run against a holdout, so your decision is measured on your store.
To start, add Benson from the Shopify App Store and leave it in observe mode through a normal week before peak.
Questions merchants ask
- Is the Honey lawsuit still going on?
- Yes. The creators' second amended complaint survived PayPal's motion to dismiss on 22 June 2026. The certification hearing is set for 11 February 2027 or later, and jury trial is scheduled for 18 October 2027.
- Can merchants join the Honey class action?
- The proposed class is US affiliate marketers, not merchants. No class has been certified, and there is no settlement or claims process.
- Which affiliate networks dropped Honey?
- Rakuten Advertising removed Honey in January 2026; a May reinstatement was reported but hasn't been confirmed by Rakuten. impact.com suspended its account and removed it from Discovery, while Awin suspended payments and access to new programmes. Check your own programme for current status.
- Is Honey still working on Shopify stores?
- Yes, network actions didn't remove the extension from shoppers' browsers. Its Chrome listing was still active on 17 October 2026; check what it offers at your own checkout.
- How do I get my codes removed from Honey?
- Honey's business FAQ directs partners to their partnerships team or [email protected]. Its Shopify FAQ directs user-generated-code requests to [email protected]. A removal request doesn't invalidate a code that shoppers already have.
- Did Honey take money from merchants?
- The Honey scandal concerns commissions merchants paid and private codes offered to other shoppers. Creators allege that Honey claimed commission on sales they referred; there is no verified total merchant loss, and no court has found liability. Your commission records and discount use are the place to check your store's exposure.
Sources#
- MegaLag: Exposing the Honey Influencer Scam (Dec 2024)
- US District Court, N.D. California: Order Denying Motion to Dismiss Second Amended Complaint (Jun 2026)
- CourtListener: In re PayPal Honey Browser Extension Litigation, 5:24-cv-09470-BLF (Oct 2026)
- Benjamin Edelman: Honey's Dieselgate: Detecting and Tricking Testers (Dec 2025)
- Hello Partner: PayPal responds to Honey stand-down allegations and Rakuten removal (Jan 2026)
- MegaLag (YouTube): Honey Gets Terminated as Lawsuits Proceed (Aug 2026)
- Honey: Getting Started with Honey: Frequently Asked Questions (Oct 2026)
- PayPal: PayPal Honey Privacy Statement (Oct 2025)
- Honey Science LLC: Terms of Use (Feb 2024)
- PPC Land: Honey targeted minors in advertising while leaking business codes (Dec 2025)
- Chrome for Developers: Chrome Web Store policy update: affiliate ads (Mar 2025)
- Chrome for Developers: Affiliate Ads, Chrome Web Store program policies (Mar 2025)
- PartnerCentric via Silicon UK: Next-Gen Affiliate Performance Measurement: PartnerCentric Leads the Transparency Movement (Feb 2025)
- Haus: Affiliate on/off test reveals the incrementality of loyalty sites for global DTC brand (May 2023)
- Affiverse: US sales through affiliate hit $113B, the PMA industry study (Jun 2025)
- Performance Marketing Association: Affiliate marketing industry study, US spend and sales (Jun 2025)
- Performance Marketing Association: Announcing the 2026 Performance Marketing U.S. Brand Survey results (Jul 2026)
- Modern Retail: DTC Briefing: How promo code leaks are impacting DTC brands' profit margins (May 2024)
- Seguno: 2025 email discount code report: what drives conversions for Shopify brands (Aug 2025)
- impact.com: The 2025 affiliate benchmark: Shoppers bought less often but spent more per order (Feb 2026)
- Seguno: 2025 unique discount benchmarking report: what 162K discount code sets reveal (Aug 2025)
- Shopify: Affiliate Commission Guide: Structures + Industry Benchmarks (May 2026)
- CJ with Namogoo: Quantifying the business value of shopping browser extensions (Nov 2023)
- Marketing Brew: Influencer lawsuits thrust last-click attribution into the spotlight (Jan 2025)
- Plaintiffs' counsel: First Amended and Substituted Complaint, ECF 9 (Jan 2025)
- US District Court, N.D. California: Order Granting Motion to Dismiss with Leave to Amend, ECF 237 (Nov 2025)
- US District Court, N.D. California: Campbell v. Honey Science, order dismissing third amended complaint (Jun 2026)
- Orrick: PayPal Secures Fourth Victory in Honey Browser Extension Litigation (Jun 2026)
- US District Court, N.D. California: White v. PayPal Holdings, Order Granting Motion to Dismiss (Aug 2026)
- PPC Land: Awin confirms Honey violated affiliate policies, suspends payments (Jan 2026)
- PPC Land: Rakuten launches open-source SDK as Honey returns to its network (May 2026)
- Chrome Web Store: PayPal Honey: Automated Coupons & Rewards (Oct 2026)
- Hello Partner: Rakuten Advertising removes PayPal Honey browser extension from its network (Jan 2026)
- Rakuten Rewards: PublisherStandown-SDK (May 2026)
- PPC Land: impact.com just kicked Honey off its network for hiding cookie theft (Jan 2026)
- Awin Group: Awin Group statement: Honey investigation (Jan 2026)
- Internet Archive: PayPal Honey listing, snapshot 2024-12-16 (Dec 2024)
- PPC Land: Honey loses 7,000 merchants as judge lets creator lawsuit proceed (Aug 2026)
- Honey Science LLC: FAQ: The Honey App for Shopify (Oct 2026)
- MegaLag: Exposing Honey's Evil Business Model (PART 2) (Dec 2025)
- r/shopify: Merchant account of leaked affiliate-code payouts (Nov 2024)
- Shopify Community: Commission only on tracked links, not coupon codes (May 2025)
- r/shopify: Merchant account of unique and single-use codes (Nov 2024)
- Hello Partner: Anonymous merchant account of Rakuten's removal email (Jan 2026)
- Benson tool: Free code check
- Benson guide: Stopping discount code leaks
- Benson guide: Controlling Honey on Shopify
- Benson guide: Affiliate agreement terms
- Benson guide: Black Friday code freeze
- Benson guide: Holdout measurement
- Benson guide: Testing a cashback partner before renewal
- Benson guide: Creator codes and affiliate links
- Benson playbook: Partner deal
