What is a Cutout:

Where Record Companies Sent Their Mistakes

There was a time when seeing a little notch cut into the corner of a record jacket was not a good thing. It meant the record company had basically given up on the album. Maybe it didn’t sell. Maybe there were too many copies sitting in warehouses. Maybe the label had dropped the artist, deleted the title from its catalog, or simply decided it wasn’t worth taking up shelf space anymore. Whatever the reason, the album was headed for the cutout bin. And if you were a record buyer in the 1970s or ’80s, that bin could be a wonderful, strange place. It could also be full of absolute garbage, and that’s part of what made it fun.

So What Exactly Was a Cutout?

A cutout wasn’t necessarily a defective record. In fact, the vinyl itself was usually perfectly fine. The record company was marking the jacket, not ruining the music.

A corner might be clipped off. A notch might be cut into the spine. A hole might be punched through the jacket. Sometimes a saw made a nice, ugly slash through the cardboard.The point wasn’t to make the record sound worse. It was to make sure everybody knew that this copy was non-returnable.

Back when record stores could return unsold inventory to the record companies for credit, labels needed a way to distinguish regular stock from records that had been dumped into the discount pipeline. Once an album became a cutout, the store couldn’t simply turn around and send it back as full-price inventory. So the label mutilated the jacket a little, sold the records cheaply to a wholesaler or cutout distributor, and moved on. The record might then show up at a local record store for $1.99, $2.99—or sometimes considerably less, and that was the bargain.

The Cutout Bin Was the Record Store’s Mystery Box

For record collectors, the cutout bin was basically musical archaeology. You’d flip through piles of records that nobody else seemed to want, hoping to find something interesting buried underneath the easy-listening albums, forgotten disco records and questionable Christmas compilations. Most of the time, you found exactly what the record company thought you would find:

Records nobody wanted.

But every once in a while, you found something completely different. Henry Rollins, lead singer of Black Flag and Rollin’s Band has a great examples.

In the late 70s, Rollins and Ian MacKaye were young music fans in Washington, D.C., with limited money and a lot of curiosity. Rollins later recalled(In a Pitchfork Interview) going into Orpheus Records on M Street and finding the first Suicide album in the cutout bin. The price? $2.99.

They bought it and took it back to MacKaye’s tiny attic bedroom to listen. And then they heard “Frankie Teardrop.”

Rollins described the experience as unlike anything in his record collection at the time. Years afterward, he said that no record he owned compared to that first Suicide album and that “Frankie Teardrop” remained the most intense thing he’d ever heard.

A record company had decided this album wasn’t moving enough copies and had dumped it into the bargain bin. Two broke young guys bought it for $2.99.

And then they went on to become two of the most important figures in American hardcore and punk. That’s the cutout bin for you…you just never know what you were going to find.

Why Were So Many Records Cut Out?

The record business was built around selling physical objects, and physical objects take up space. If a label pressed 100,000 copies of an album and sold 60,000, it had a problem. Those other 40,000 records were sitting somewhere. Warehouses cost money. Inventory tied up money. And retailers didn’t want to keep giving valuable shelf space to albums that weren’t selling.

So eventually the label had to make a decision: Keep trying to sell them—or get rid of them. Cutouts were one answer, because a title could be removed from the active catalog and the remaining copies sold at a steep discount. The label got something back instead of sitting on dead inventory, the distributor got cheap records, the retailer got bargain merchandise, and somebody walking into the store might get an album for a couple of bucks. It was basically the record industry’s version of a clearance aisle, except the clearance aisle occasionally contained something brilliant.

And This Is Where Cutouts Get Interesting

Here’s the thing collectors sometimes forget: The record company didn’t necessarily know the record was bad, they just knew it wasn’t selling – and those are two very different things.

Commercial success and musical importance are not the same thing. Plenty of records that later became hugely influential were not exactly setting the cash registers on fire when they were released. They were too weird, to out there, not marketed properly, whatever…

The cutout bin didn’t care and neither did the record company – If the inventory wasn’t moving, out it went.

Did the Cut Make the Record Worth Less?

Historically, yes. Collectors generally preferred an untouched jacket to one with a hole, notch, clipped corner or saw mark. If two identical copies were available in otherwise identical condition, the clean copy was usually the one you’d rather own, and that makes perfect sense.

One copy looks like it just came out of the record store. The other looks like somebody attacked it with a power tool. But there’s an important distinction:

The cutout mark is damage to the package, not necessarily damage to the record.

The vinyl inside can be every bit as clean—and every bit as playable—as an unmarked copy. So, for someone who simply wants to hear the music, that little notch may not matter much at all. But for a serious collector chasing a pristine copy, it can matter quite a bit. And that difference has become increasingly important as the vinyl market has changed.

The Old Rule Doesn’t Always Work Anymore

For years, the general collector wisdom was simple:

Cutout = bad.

And as a general rule, that’s still useful, but it isn’t nearly as absolute as it once was. Today, you’re much more likely to run into a scarce or desirable record where the cutout mark is only one part of the equation. If you’ve got a common album with a big saw cut through the jacket, sure—the mark isn’t helping. But if you’ve got an obscure record that only exists in relatively small numbers, the equation changes.

Suddenly the question isn’t:

“Is this a cutout?”

It’s:

“How hard is this record to find?”

That’s a much better question. A rare record with a clipped corner can still be worth considerably more than a common record with a perfect jacket. And sometimes the cutout version is the only copy you’re going to see for sale.

The Cutout Bin Created Some Great Irony

The Cutout Bin Created Some Great Irony

There’s something wonderfully ridiculous about the whole thing. A record company looks at an album and says: Nobody wants this, then iIt marks the jacket and sells the record for a couple of bucks. The record disappears into bargain bins across the country.

Then 30 or 40 years pass, and suddenly the record nobody wanted is the record everybody wants. The artist has become influential, the album is now considered important, and original copies are getting harder to find. Just look at what happened to Sixto Rodriguez’s Cold Fact.

And there you are at a record show, holding a cutout copy with a little notch in the corner, wondering why the dealer wants $150 for the thing the record company practically gave away.

That’s the vinyl market for you.

What Should You Do If You Find a Cutout?

Don’t automatically put it back. Look at the record, not just the jacket. Check the pressing, label, catalog number, and the information in the dead wax, then take a good look at the condition of the vinyl itself. Most importantly, see what comparable copies are actually selling for. A cutout mark tells you something about the history of that particular copy, but it doesn’t, by itself, tell you what the record is worth today. That’s an important distinction: the record company was trying to get rid of inventory; you’re trying to figure out what the market thinks that record is worth now. Those are two very different things.

The Best Part of the Cutout Story

Maybe that’s why the cutout bin remains such a great part of record-store history. It was never supposed to be a place where you found important music—it was where the music business sent the records it had stopped believing in. And every once in a while, somebody dug through the pile and found something the music business had completely misunderstood. Henry Rollins found Suicide for $2.99. He didn’t know he was buying a piece of punk history; he just knew he’d found a weird record with a crazy cover in the cheap bin. And that’s probably the best argument there is for digging through the bargain records. Sometimes the record company is wrong. And sometimes it’s wrong by $2.99. I remember buying The Saints, Eternally Yours in the cutout bin at Sears when I was a teenager, and being blown away. Somewhere, along the way, I sold it, and have regretted it ever since. So, I’m no Henry Rollins, but the cutout bin definitely changed the course of my music interests – for the better.