Why cuts into vinyl covers?

Richard Carlin wrote what is probably the best bio of Morris that was published a few years ago, entitled Godfather of the Music Business. It has lots of stories and backs up some of the stuff I heard about as a young lawyer in NYC who was doing a fair amount of work in the industry. The record industry definitely had a "mob" issue-- from payola to distribution to pressing plants to various behind the scenes figures. And it wasn’t confined to the States, either. There was money to be made, and in many cases, it was a cash business, as was concert promotion, so when you stand back and look at the business you can see why it presented a lot of opportunities for the criminally minded.
FWIW, Carlin’s portrayal of Levy is pretty even-handed- Levy was in some ways a genius- he had the first integrated jazz club in NYC, got into the rock and roll craze early on, signed unknown acts, then promoted them at rock and roll shows (Alan Freed was one of his promoters- famously went to prison for payola). Everybody was afraid of Morris Levy-- there are some great stories in Carlin’s book about how unwitting young employees would be sent to his office to "collect" not realizing who they were dealing with. Sorry to derail your thread on cut-outs, but Morris Levy was the first person who came to mind. BTW, one of the famous tax scam labels,Tiger Lily, was also a Morris Levy affiliated business. A copy of one of the albums on the label, Stonewall, sold a few years ago for 14k-- the guy who found the copy knew exactly what he had: [url]https://www.brooklynvegan.com/stonewall-lp-se/[/url]

Growing up I lived two blocks for a RCA record plant in NJ workers on the loading dock would give albums and singles and told us if it had a hole in the cover it was returned from the stores and if it had a cut into the vinyl it was defective I have some promo albums and they say on them for promotional use only and I got those from a friend who work in NYC radio
Don't know how many of those records we sailed on to the roof of the plant from the hill behind it  

When I worked at Tower Records in the early 1980's, I just loved the LPs  we affectionately called Cut Outs.  Mostly they were promotional copies sent to the record stores in the hope they'd be played on the store's record player and perhaps garner a couple of sales.  Cut outs were almost always among the first copies generated at the pressing plant so they sounded wonderfully fresh and quiet.  We almost never saw defective ones.  When the store manager got to know your tastes, he/she'd sneak 'em into your in-box to take home.  I still own more of my share of 'em. And oh yeah, several of the other record stores I frequented had cut-out bins where stuff was heavily discounted.  I'd see one that caught my eye and just take a chance.  After all, they never cost very much.

There used to be this thing called the budget bin in record stores. The records in there were much cheaper, just a dollar or few, and often the covers were notched or a hole punched to designate them as budget bin and keep the value down permanently.

Interesting read but many different takes. More confused  than ever.