Probably too complex to explain here but tldr; every cash back program is built on top of the affiliate marketing rails since Ebates started it in 1998. Same for coupon websites since those came along.
It is a system design flaw (that maybe will self correct because of this) that multiple advertising models at different points in the value chain are built on the same system. 'Multi-touch' or 'any-click' are the correct direction to solve this problem but introduce their own challenges for retailers which is why most of them have not adopted these systems yet.
You ask "what exactly is Honey doing here?"
Short answer is helping the retailer with conversion and limiting cart abandonment by making the user happy and more likely to transact.
We always tried to be as transparent to our users as possible in the product, in the faq, in our customer support, etc.
You can see evidence of that approach at 6:17 in Jonathon's video in the response that he got from customer service about how Honey works (even when he intentionally removes critical context). He reads a support email that says:
"If Honey is activated and is the last program used while shopping on a site, it is likely Honey will receive credit for the purchase, and Gold will be earned by the member. However, if your favorite influencer's affiliate link was the last program associated with your purchase during your shopping on the site then they will receive the credit for the purchase. Keep in..."
Notably he stopped reading before the "and Gold will be earned by the member" because it didn't fit his narrative.
I know it flashed on the screen faster than anyone could read and was zoomed so you couldn't see the whole thing on one screen but would you consider this level of transparency adequate if he read the whole thing?
Ryan here too - will try to respond to some of these with more info.
The two biggest missing pieces from both my discussion and from the video are:
1) stand down rules for affiliate, and
2) cash back to the user.
I was trying to address the claims he raised in the video specifically and since he didn't mention either I didn't in my reddit post except for a little bit in a couple of the answers.
1)
For the case where the store only uses last click (which is most of them) Honey and other browser extensions follow a rule set by the affiliate networks called 'stand down'. This means they attempt to detect when another affiliate link is clicked (e.g. from a creator) and then either fully disable the functionality or at least don't use affiliate links. Only browser extensions are subject to these rules (e.g. if you visit a coupon code website they will use their affiliate link and override the creator).
Detecting this can be a bit tricky across numerous affiliate networks and I suspect the NewEgg example was selected because it used a non-standard way to manage affiliate tagging and therefore wasn't detected by Honey's stand down logic.
fwiw I agree with the sentiment that Honey shouldn't have been tagging on a 'hey we didn't find any codes' or 'use paypal' click and I personally wouldn't have approved that, though it probably technically does meet most of the affiliate network stand down rules (well, at least it did - I'm sure they've been updated which is a good thing).
2)
Jonathon's video is completely silent on the other core value proposition of Honey: cash back. Honey, like Rakuten, Capital One Shopping, etc, offers cash back funded by affiliate marketing. The model is not new - Ebates (now Rakuten Rewards) was founded in 1998. Honey added this program in 2015.
When a user is shopping with Honey on a store with affiliate commission, Honey almost always gives the user cash back. There are a limited number of exceptions, generally because of the store's policy, and occasionally because there are so many exclusions to the affiliate program that it makes offering cash back confusing to a user.
A valid question to ask is: if a user clicks a creator affiliate link AND has a cash back tool like Honey or Rakuten should they or should they not be eligible for cash back. Personally I think absolutely yes, the user's preference is the most important. But I've heard reasonable people argue the opposite.
What I don't think is that offering it's users cash back makes Honey a scam and I think Jonathon was negligent in presenting this narrative without even considering this primary use case for what is actually the #1 business model in affiliate marketing.
I'll stop there. Happy to answer a few more questions here.
It is a system design flaw (that maybe will self correct because of this) that multiple advertising models at different points in the value chain are built on the same system. 'Multi-touch' or 'any-click' are the correct direction to solve this problem but introduce their own challenges for retailers which is why most of them have not adopted these systems yet.
You ask "what exactly is Honey doing here?"
Short answer is helping the retailer with conversion and limiting cart abandonment by making the user happy and more likely to transact.