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The New PayPal Scandal is Wild
raindog308
Administrator, Veteran
in General
Besides the fact that their stock has tanked 70% over the last few years, apparently they've been running a highly sophisticated scam via their Honey acquisition.
Comments
Since PayPal can be hard to avoid, what are the best practices for dealing with it? Special external accounts, addresses, etc?
Scammers got scammed, nice!
What is hard in avoiding it?
To answer the above question, PayPal dominates p2p trading of tech goods on web fora. Many demand PayPal. One could insist on alternatives at the risk of missing out. IncogNET provides (to the best of my knowledge) little alternative outside of crypto. How may times does PayPal process one's payment without one even knowing? Crypto for regular transactions remains niche. Rather than sidelining myself, I'm asking how to make the best of a shitty situation.
Waiting for a TLDR / watch
Oh this has been on my X feed for quite a while now but never bother to check it out. What's the TLDR actually? Anyone?
Honey has been acting as a middleman for coupon codes, even when they don't provide you one, they still hijack the referral link you initially followed and replace it with their own. So they were stealing all that affiliate money basically. LegalEagle (on YouTube) has filed a class action on behalf of many content creators.
They also made an adblock extension called Pie recently which blocks YouTube ads and replace them with their own trackers
I mean, what a racket! It's actually genius besides the part where they couldn't possibly think that nobody would notice this at some point? I'm sure a cost-benefit analysis was done that determined that the profits would be far greater than anything they might have to pay out in a future lawsuit.
The biggest problem is refunds for anything in a few clicks. For the buyer it is of course good, but for the seller it becomes a big problem as it is a huge scope for fraud when they pay for the goods after receiving them and then without making attempts to return them make attempts to take money from the seller. That is, the seller eventually sends the goods for free and at his own expense.
So Paypal is actually a legalized method of fraud.
Pay by credit card through paypal. Paypal be useless and pay for overhead to run transaction.
What does this fix? NUTTIN
PayPal also recently stealthily changed the currency exchange method, which now defaults to PayPal handling and the conversion fee is way higher than that of banks.
I don't think that's recent, for a long time I have to change the currency back to original on every payment because I get better rate from my bank (which is never preferred to exchange cash) than from Paypal. They are only alive because of posturing as an expensive middleman.
To be honest, when this went around I thought I was reading old news. I remember a lot of people knowing about this "scam" at least a few years ago and thought it was common knowledge. Probably can't find it anymore with how the topic is flooded with recent posts, but I recall reading a Reddit post a couple years ago about how Honey makes its money, and the top commenter basically said what the "scam" was.
That's the first point. If I understand it correctly, also merchants that cooperates with honey can control what coupon codes are there, so term, that Honey is finding THE BEST discount seems to be untrue.
Buyers (often have to) trust PayPal - and get scammed
Sellers (often have to) trust PayPal - and get scammed
"Affiliates" trust PayPal - and get scammed
I'm neither surprised nor did I really learn something new. And PayPal making a profit by basically putting themselves in between buyers and sellers it shouldn't surprise anyone that they try to "optimize" that.
Frankly, I have zero pity for the "affiliates" who basically just try to be yet another "intermediate layer" aka highwaymen i.e. a micro-version of PayPal's business model, and if we're honest something like "honey" was to be expected. "Optimization" as in "scam every party involved" ...
But this thread is a good reminder, so thank you @raindog308!
Side note: This reminds me of so many people buying online or at mega-stores in order to save a few bucks ... and then are shocked to find out that due to so many local stores, especially small ones ("mom and pop store") going belly up many, many jobs for their kids are lost. Often it turns out to not have been that smart after all, their "smart shopping" ...
Guess did they receive adequate punishment?
It's been a while since those "expose" videos dropped.
i have preferred using PayPal since they offer some form of buyer protection, but recently their payment currency manipulation has become rather irksome and in one case was unavoidable on mobile.
Downfall of paypal is a good news. Hopefully they will run it to the ground soon.
Unpopular opinion: Honey is just like any coupon site as a browser addon. Nothing weird about it.
Search for ’Amazon coupon’ or whatever, all sites will open a link in a new tab that will replace the affiliate attribution no matter if the coupon provided works or not. It’s how coupon sites have always worked, since forever.
If you’re shocked about this you must be living under a rock.
Unpopular opinion concluded.
I am actually surprised that none of the paypal lawyers figured this out
Interesting. Does anyone know if all of these coupon sites are doing this hijacking? That'd be really annoying
The issue is not with it replacing attribution when it is being used, Megalag (The youtuber who exposed it) found that honey was replacing attribution even when it does not find any coupon code or had anything to do with the sale.
I am not even getting into their claims of finding the best coupon code and then only showing coupons that stores approve even when there are better code available elsewhere
So do all coupon sites. They'll just fake a coupon with saying like "10% off some electronics" but that's just a current promotion, no coupon needed. They'll do anything to get you to click, even if there's no coupon.
Same goes for all coupon sites. They have to follow the affiliate guidelines, otherwise their affiliate deal is shut down by the seller.
Tl;dr: I've been working full-time with SEO and affiliate stuff, that whole thing is shady. But what Honey did, completely normal. Just the same as everyone else has been doing for 10+ years easily.