An English idiom
meaning "to pay an excessive price."
The phrase dates back to 9th century AD Europe, and the Europeans' displeasure at having to pay tribute to the Vikings in order to prevent raids.
After suffering through many Viking raids on their villages, the local (French, Irish, English, accounts differ) chieftans decided to try buying off the Scandinavians. This had the opposite effect than that desired: instead of keeping the raiders at bay, these payments only encouraged the Vikings to return, lured by easy profits with little danger of a fight. When the locals got wise to this plan, they tried to stop payment, a move their assailants were not particularly happy about. As a warning to those who would consider not paying the tribute, the raiders would cut a large slit in one nostril of the cheiftan, thus encouraging others to "pay, through (example of) the nose."
1 - The History Channel
2 - http://viking.no/e/heritage/ee-money.htm
3 - http://europe.cnn.com/SPECIALS/2000/denmark/stories/viking/