Honey doesn’t charge its users anything to access its extension, so how does it make money? That’s a great question and something that leaves a lot of people racking their brains in search of an answer. The truth is rather mundane and boring – affiliate marketing.
Honey’s extension operates across a variety of search engines including Chrome, Firefox, Edge, Safari, and Opera. Honey is also available to Android and iPhone users courtesy of the company’s mobile app.
Honey enables you to find great deals online. It does so by scanning websites and stores within its affiliate networks to find you the best bargains. All of which are accessed using Honey’s promotional codes, coupons, and other such money-saving deals.
Coupons are Honey’s main specialty and it’s a smart value proposition too because the coupon has been around since 1887 (roughly 135 years to the present day) meaning it has stood the test of time. Asa Candler created coupons to market Coca-Cola, you may have heard of it, and what a shrewd move that was. The soft drinks giant has amassed a large, loyal following along the way to becoming the biggest brand in the world.
But for Honey things aren’t as sweet as they might seem. Honey has been embroiled in data security scandals or at the very least had its credibility threatened. I’ll cover all this and more when I explain how Honey makes money.
Bottomline Up Front – How Does Honey Make Money?
For Honey to make money the company must first partner with commercial retailers. Then once a sale is made, which Honey has ably assisted through the provision of one of its coupons, the discount app takes a percentage commission of the sale price. Honey refers to the people who enter into this business relationship with them as Merchant Partners.
The commission owed to its merchant is individualistic meaning it varies from vendor to vendor. Typically, the percentage commission equates to 1-10%. Although, it can be as high as 20% so it’s totally sensitive to offerings and the market.
That’s an important point to make because it communicates the fact that Honey needs its partners to succeed if it’s to remain profitable. So it’s got a nice symbiotic relationship going with all its partners. There are two ways members can help Honey achieve a profit. These are when the app is used to find savings and when Honey Gold rewards are activated.
The affiliate working in conjunction with Honey and the online store must therefore alert Honey, using most probably automation, that a sale has been made.
Another way the coupon extensions make money is via Honey Gold, which essentially gives users cashback as a reward for their loyalty. The knock-on effect is positive WOM and eWOM, reduced churn, and a holistic increase in brand awareness. All of which, help Honey continue to make money. There are also free tools that serve as unique value propositions thus enabling Honey to attract even more customers.
What is the Honey Extension?
Honey is an affiliate program that functions as a free browser extension. The app enables customers to find the best prices when shopping online through stores partnered with Honey’s associate (or affiliate) network. Coupons are essential to the successful operation of Honey’s extension, which will be explained further in the next section. Essentially, the Honey app can be defined as a tool that connects customers with automatic coupons, promo codes, and deals so that they can grab a bargain.
How Does Honey Work
Honey searches for coupons and discount codes to give its members the best deals. The app is connected to something like 30,000 stores, so it really does have a huge reach.
Honey’s web extension offers a droplist that alerts users to deals. You’ll be provided with a code and a rough timeline as to when the code was last activated so you can decide whether it’s worth trying. There’s also a daily rewards rate available and updates on certain stores’ promotions in the “Trending” section. My guess is you’ve got to pay Honey extra to have your store placed in that field. The app also notifies users when prices have dropped and a bargain is to be had.
To get started with Honey, you first have to download the browser extension. This process is simple and I’m almost certain it’s compatible with all the main search engines. Honey discounts and coupons are available when you go to purchase a product and can be entered at checkout. To avail of deals, you just need to click on the extension and see if the app identifies any suitable promotions. The Honey app is also useful when comparing product prices trying to find the best deal.
How to Become a Honey Merchant Partner
Honey doesn’t actually work directly with parent companies. Rather, they work with affiliate networks, also known as partners, to disseminate their services. eBay Partner Networks and Affiliate Future are prime examples of such affiliate partners.
These networks connect online stores to merchant affiliate programs similar to Honey and vice versa. Honey works with over 40,000 stores including the likes of Nike and Adidas so it’s a huge company providing a win-win for everybody!
The extension has many partners including the likes of eBay, Afilio, Rakuten, and a substantial number of other such reputable entities. Honey coordinates with 24 affiliates in total to ensure the success of its offering. You can check out the full list HERE.
Does the App Sell Customer Data?
Honey’s extension scrapes the webs for data that its software recognizes as commercial promotions from within its associate network. This fact is a settling influence because a lot of people are afraid Honey could take their personal data and sell it to third parties for a fee. But there’s most likely no reason for the company to take such a bold risk considering it has strong brand equity and makes plenty from commissions alone. So, Honey claims it doesn’t sell user data or information.
That being said Honey does disclose some of your data to third-party sites. However, this information cannot be linked back to you in any way as it’s not personally identifiable.
Honey’s Legitimacy as a Company
Honey is 100% a legitimate company and there’s no reason to doubt its rapport. The company’s headquarters are based in the downtown area of Los Angeles, the United States. Ryan Hudson is the c0-founder of Honey and he’s also the person who came up with the idea of a coupon extension. According to Hudson, the idea manifested itself in the rather obscure setting of a pizza shop while he was entering a discount code to enjoy a meal with his family.
Humble beginnings for a company that was recently purchased by PayPal for a whopping $4 billion! Funnily enough, the moment Honey became a subsidiary of PayPal Bezos had Amazon piping up about the security concerns Honey members ought to be aware of. Granted Honey does collect a great deal of data pertaining to customer shopping behaviors and whatnot. But, let’s be real. No one at Honey is going to come out and say, “Hey, let’s make more cash by selling customer day…” Right?
After all, we’re in the age of data security. The almighty browsing cookie is no more, that’s how seriously people now take their data. So it’d be akin to commercial suicide if Honey were to do anything short of their utmost to prevent data leaks.
Honey Data Harvesting
Naturally, these people are professionals so they didn’t accept that answer and analyzed the extension to find that it possessed an exv value. Meaning Honey can in fact connect events to unique user IDs, thus not having an account was an illegitimate reason to deny his data access request.
In the end, Honey did allow this person, Malte, to view his account because they had been caught out. Once he received those files the team at Data Requests.org were pretty annoyed because they could clearly see Honey is collecting data on its users even if they don’t have an account.
Excellent detective work and a warning shot to all of us that use Honey because a security breach means that all your browsing history could be leaked. It’s worth noting that this could have been a blip, it’s not beyond the realms of possibility that a Honey employee was just being lazy, is it?
Ok, so here’s a much more detailed account of Honey’s origin story. Ryan Hudson was buying pizza for his kids online. At that time, the man was struggling financially and his kids were just six years of age. So, he couldn’t help but think how beneficial a coupon of just a few dollars might be for him considering how tight things were at the time.
After all, this was a man who had in the same month rang every single one of his utility providers in a bid to save an extra $200 monthly. For a lot of us, that’s standard behavior. But for a man that’s now worth $1.5 billion (as is his partner George Ruan), I’d characterize that as nothing short of a fairytale turnaround in fortunes.
Mr. Hudson said that if it weren’t for something as simple as wishing he could get money off a pizza he ordered online, he would never have conceptualized Honey. Mr. Hudson is an MIT-trained engineer and clearly has a lot 0f gusto, so that night he set about building his coupon browser extension. Hudson and Ruan worked tirelessly to get Honey up and running, but it wasn’t easy. In fact, the struggle was so great, that in 2013 Hudson had to go back to employment as a product manager. Hard work pays off!
Alternatives to Honey’s App/Extension
In this section, I’ll provide you with some similar apps to Honey while I’ll also be communicating their unique value propositions.
1 – Swagbucks
Swagbucks is one of the best money-saving apps around and has been optimized to help customers find rewards. The American Company is based out of El Segundo, California, and prides itself on rewarding customer loyalty to help online stores decrease churn and improve brand equity.
2 – Invisible Hand
This app is similar to Honey in that it’ll alert you to better deals at checkout. You’ll then receive a link to the store or site which possesses the superior offering at that price point. It’s a good option to know about, particularly when traveling.
3 – Rakuten
Rakuten is a Honey partner and its main offering is ensuring that customers find fantastic cashback deals. In truth, they’re both extremely similar, so when used together they’re sure to help you save time and money. Both extensions are compatible being partners and all, so it makes sense that using them in tandem will help maximize savings.
4 – Cently (Coupons at Checkout)
At checkout, Cently will notify you that there are coupon codes available and then provide you with the opportunity to apply said codes with just one click. The Cently app will also verify which coupons work and present to you the one with the biggest saving. This approach ensures that you’ve got the best chance of grabbing a bargain. Finally, Cently also offers cashback and rewards so it’s a noteworthy alternative to Honey.
Honey’s Availability Globally
A lot of you might be wondering where Honey’s app is available and that’s understandable considering the vague nature of Honey’s affiliate networks. Nevertheless, Honey’s app is available in countries such as the US, Canada, Australia, and the UK. Honey is also available in Ireland, India, and the Philippines. One thing to note is that Honey’s extension is only accessible to sites in a limited number of countries.
What That Means
So, you can use the app from anywhere but you may not be able to connect your site to the app depending on your location. In other words, if you’re a customer then you can use the app irrespective of location. But if you’re a business person, you may not be able to interconnect your store with Honey’s associate network. Contact the company today to find out if sites from your country can enter into the extension’s network.
Honey Extension Pros and Cons
- Have Honey installed on your device in a matter of seconds and the whole process is incredibly straightforward.
- Honey extension reviews all attest to the company’s ability to save its users money.
- Costs nothing to install or use.
- There’s a wide range of sites and stores that offer discounts, coupons, and money back through Honey’s affiliate network.
- Honey finds you all the best deals to help you save money and even alerts you at checkout just in case you forget.
- The Honey Gold rewards system pays the extension’s customers back for their loyalty once they complete so many Honey purchases.
- There’s a referral system in place that enables you to earn even more Honey Gold for your lucrative e-gift cards.
- There’s a Honey Mobile app for android and iOS
- Customer support is really slow at getting back to you.
- The money-saving promotion you want won’t always be on offer. I.e. no coupon codes.
- Honey’s mobile app is only available in select nations (See this Honey support article for more information).
- You sometimes don’t know what a code entails until you apply it at checkout.
- Codes in Honey’s database are often out of date and the time they were last activated is visible to help you discern whether or not that is the case.
- Business people can’t use Honey to promote offers on their site if they don’t live in select nations.
Honey Frequently Asked Questions
Question: What is Honey App Review?
Answer: The sentiment seems to be that Honey’s app is great because it’s free and conforms to sample in that it’ll save you time and money. But, there are plenty of things people dislike about Honey. For instance, sometimes when you go onto a website for which Honey offers coupons, you don’t receive a popup notification. So you can’t get the benefit of having Honey installed. There’s also the issue of Honey collecting your data that makes people uncomfortable. All in all, Honey is effective in what it offers and worth using – in my opinion, at least. Also, people seem to like Honey Gold so like anything there are pros and cons involved and you’ve just got to do your research and decide for yourself.
Question: How much is Honey Gold Worth?
Answer: One unit of Honey Gold equates to $0.01. When you buy products through Honey you have the chance to earn Honey Gold and eventually save some money on your purchases.
Question: What is the Honey App for Amazon?
Answer: The free browser extension will navigate Amazon’s product listings and compare competitors to unearth the best prices. It also tracks the price of products and other such relevant data over time. The pair are not affiliated and it only works on the .com version of Amazon’s marketplace.
Question: When Does Honey Apply Coupons?
Answer: Honey applies coupons at checkout when they are ready to use. The extension automatically sifts through the coupons available to find the one with the greatest saving that works. This process can be highly convenient although it has been known to malfunction from time to time.
Is the Honey Extension Worth it?
Overall, I would say that it’s worth using Honey’s extension for the simple fact that it’s guaranteed to help you save time and money. You won’t have to browse the internet looking for coupon codes and it’s free to use so it’s a great deal.
Granted, you may be worried about your data and how secure the platform is, but that comes with eCommerce territory in the modern age. Honey does harvest your data and information but it’s by no means selling it to third parties for extra cash.
Instead, it’s using it to improve its services in a bid to better understand customers’ pain points and provide more profitable solutions for you as well as themselves. The data it shares does the same for its partners. However whether or not Honey’s data collection is entirely ethical or transparent is, well, another question entirely. Personally, I think Honey shouldn’t collect my data without first asking me if it’s ok. Common courtesy can go a long way!
So, is the app worth it? I would have said yes before writing this article and I still do today, although I’m now much more apprehensive, to say the least.
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