Buzz
When PayPal revealed that it would acquire Honey—the popular browser extension and app that helps shoppers find discounts and coupons—I was intrigued. But what really caught my attention wasn't just the acquisition itself. It was the $4 billion PayPal agreed to pay for the company, primarily in cash. What could they possibly see in Honey’s 17 million users?
The answer, however, is clear: data. Every service designed to help you find deals, discounts, or cash-back incentives needs to collect details about your purchasing habits in order to offer those benefits.
But is it worth sacrificing your personal shopping data just to score a coupon? There’s no easy answer here—it depends on the service, what kind of data they gather, and how they choose to distribute it—often, meaning sell it.
How Online Shopping Browser Extensions Generate Revenue
Shopping extensions and apps typically rely on two key strategies to earn revenue, enabling them to offer their services at no cost to you. These methods are likely in use for most of them:
First, they earn a commission from stores for participating in their programs. For instance, if Rakuten offers you 5% cash-back for shopping at a certain store, that store is likely paying Rakuten a commission of more than 5%. You’re only receiving a portion of the total commission. Stores engage in these programs to attract both new and repeat customers. It may take months or even years to turn a one-time shopper into a loyal, returning customer. But once they are loyal, they’ll often keep coming back—even without a special promotion.
Second, these services use your shopping data to help retailers gain insights into consumer behavior. For example, Honey has been open about how it operates. Honey claims it doesn’t sell your personal data but collects information solely from your shopping activity to fulfill its core mission: finding coupons for users. However, it does share aggregated, anonymized data about user activities, which doesn’t point to any individual person.
This could involve data like trends on how people purchase toothpaste online, which may be compiled into a report for dental health companies. Or, it could be a report about shopping behaviors of a specific age group. These examples are hypothetical, but they show how these apps can take your personal shopping patterns, anonymize them, and create analyses of larger consumer behaviors, which can then be sold to industry players.
"The modern internet wasn’t designed with your privacy in mind," stated Max Eddy, a security expert and software analyst for PCMag. "Every site, every app, every service is observing something, and you’re often unaware of what or why." You might not be concerned that a website or app knows you bought a pair of shoes, Eddy said, but if you were aware of all the other data being gathered—such as your name, address, or favorite color—you might start to feel uneasy about your privacy.
Why It’s Difficult to Know Which Apps You Can Trust
Every browser extension and app operates on its own terms, which can make it hard to figure out what data you’re exchanging in return for a discount. Tristan Rayner of Android Authority observes that, generally, apps tend to collect more of your data than browser extensions, with some defining "partners" in disturbingly broad terms—meaning who can access your data and what kind of services or ads they can offer you. Rayner singles out the cash-back app Ibotta as one particularly problematic example.
Cash-back shopping apps and portals tend to gather more of your information, but this is because they offer you a higher reward. Coupon extensions typically collect less data, though their effectiveness can vary, according to Kevin Brasler, executive editor of Consumers' Checkbook, a nonprofit group dedicated to consumer advocacy. While cash-back apps are generally more consistent at delivering the rebate you want, they often don’t provide much transparency about how your data is being handled.
Unless you dive deep into the privacy policy of each app, it’s nearly impossible to know how much personal data they’re collecting or selling. The same holds true for every credit card or store loyalty program. Companies not only want your purchase dollars but also crave insights into your buying patterns.
"Your privacy no longer exists, as far as I can see," stated Brasler. "If there’s something you want to purchase and prefer no one to know about it, avoid any cash-back portal. Actually, just go to a physical store and pay with cash."
How to Use Shopping Browser Extensions Responsibly
Perhaps you're comfortable with an app accessing the details of your most recent grocery bill. Maybe trading a little of your personal info for a discount feels worthwhile. But what is privacy in 2019, really? If you’ve decided to forgo keeping secrets, that’s your choice. However, don’t grow complacent, as it could end up costing you both your personal data and your money.
"All of these services are essentially designed to encourage spending," Brasler remarked. "They’re created to make you spend more. Retailers wouldn’t be offering commissions unless they found it beneficial in some way."
Before assuming that the store with the highest cash-back offer always has the best prices, take some time to research the product you're intending to buy. See a coupon for a name-brand item? The store’s own brand may still be a better deal, even after applying the discount. Browser extensions and apps that help you find deals can certainly be useful, but don't become too complacent when shopping on a budget.
