How The Honey Scam Affects Shopify Sellers

How the "Honey scam" affects Shopify Sellers. This episode is for anyone following the se past month and wondering how it affects Shopify sellers. Link to original expose video: https://www.youtube.com/watch?v=vc4yL3YTwWk

Episode Transcript

(00:00):
One month ago, the YouTube knownas Megalag released a video
called Exposing the Honey Influencer Scam.
Currently it has over 16 millionviews and over 1.2 million
likes, which definitely shows this is something people care
about and this is something thatpeople simply weren't aware of.
I'm not going to do a recap of everything he covered in that

(00:22):
video because it's great. If for some reason you haven't
seen it yet, I will link to it in the description, but what I
want to talk about over the nextfew minutes is how this can
directly impact us as Shopify store owners and what we can do
to make sure it doesn't. In Mega Lags video, he actually
calls attention to multiple issues with the Chrome extension
known as Honey. In this video.

(00:44):
I want to focus on one of them. First of all, if you're not
familiar with Honey, the way it works is you install it as a
Chrome extension. And then when you're checking
out on any e-commerce store, it supposed to scour the Internet,
find the best discount codes that might be available on that
store, and then let you use thatdiscount code so you can save
yourself some money as a consumer.

(01:04):
That sounds good, right? It's a win for a consumer.
But the problem is what it also does when it's going out there
and finding these discount codesis it replaces the tracking
cookie from whoever referred that website visitor to your
store. I'll give you a quick 32nd
overview of what that means. Let's just say I was an
affiliate for your store. I maybe wrote a blog post or

(01:25):
made a video promoting your store.
I had my tracking link, somebodyclicked it, they went to your
store.com. They then got to check out, and
then they saw Honey pop up saying there's a discount
available. They went out and got that
discount code. And what does Honey do?
It basically refreshes the checkout page and it overwrites
the tracking cookie in this casethat I originally sent with

(01:47):
honeys. So Honey is basically earning
all of of these commissions and building a massive business
that's almost hidden. And I'm not saying this is even
illegal legal. Legal is suing them.
I'm not sure if this is the exact reason why but this is
something that is definitely an issue and I believe can even
hurt our stores, which I would call small stores when you

(02:08):
compare them to the massive Shopify giants like Kylie
Cosmetics. Because what this can really do
is ruin your affiliate relationships and actually harm
the people that want to promote you.
And this might be other blogs orother info sites or any
influencers or even previous customers that you give a
referral link to that try to send their family and friends to

(02:29):
your store. Now here's how we are going to
avoid this. This is the most important part
here. If you are running a Shopify
store like we do and you have a referral program set up like we
often do on most of our stores, there are different settings
that you can configure in whatever referral tool you're
using. And one of them is basically to
have what is known as an open affiliate program.

(02:52):
This means anybody can sign up for it, whether it be a person,
whether it be a mega corporationand when they do they will get
their tracking links and again it will track their earns
commissions. Now the other way to set up an
affiliate program is what is known as a closed affiliate
program. What this means is people can
alley to be affiliates but they're not going to get a

(03:12):
tracking link. They're not going to get
anything until you, as the business owner approve them.
I want you to make sure if you're currently running an
affiliate program or you ever plan to run one in the future,
set it as a closed affiliate program.
Because if it's not, what's going to happen is you're going
to have companies like Honey andothers sign up for affiliate

(03:33):
links. And again, it's going to take
away the commissions that your actual affiliates are working to
earn. And let's just say you already
have a bunch of affiliates that are doing well.
They're sending you traffic because there's that reciprocal
relationship where they're earning commissions.
If Honey signs up for an affiliate account and their link
starts overwriting all of your actual affiliates, your

(03:54):
affiliates commissions will dropoff a Cliff.
Even though they did nothing wrong, they will stop promoting
you and it will actually hurt your sales.
So please keep that in mind. That's the lesson for today.
That is how the Honey app and this whole influencer scam as
Mega Lab calling it again watch that video it's great is and can
affect Shopify sellers O as always guys hope you got value

(04:16):
and I'll be back shortly with the next video.