'Scratch and Sniff' refers to the end result of Micro-Fragrance Coating technology. Invented by 3M, this microencapsulation technology allows the application of persistent fragrances onto paper, released by pressure.

Present in perfume advertisements in magazines, on stickers, and even movie paraphernalia (Polyester, a movie made in 1981 featured 'Odorama', and invited users to smell a card at various points during the movie), scratch and sniff technology is bigger than banana-scented Donkey Kong adhesives.1

Fragrances, almost by definition, must be very volatile -- in order to preserve them, one must prevent them from vapourizing. The most common way to do this, of course, is to keep them in an air-tight container. This is exactly how scratch and sniff works -- but on a much tinier scale.

Consider thousands of miniscule (of the order of a few microns in diameter) plastic (or gelatin, or glass) spheroids containing small amounts of a fragrance, suspended in an ink or glue and applied to a piece of paper. Scratching or rubbing this paper will rupture many of these capsules, releasing the scent.

It's worthwhile to note that this microencapsulation technology was originally developed to create carbonless pressure-sensitive copy paper (aka no carbon required or NCR paper). The bottom of the top sheet is covered with microcapsules containing a colourless ink, while the bottom sheet is coated with a developer chemical.

The Boston Museum of Science web site (see link below) has an excellent picture of these microcapsules, taken at 1000x magnification.

Source:

Howstuffworks
http://www.howstuffworks.com
The Internet Movie Database
http://www.imdb.com
The Straight Dope
http://www.straightdope.com
Boston Museum of Science
http://www.mos.org/sln/sem/scratch.html
/me scratches vigourously at the corner of the desk and inhales deeply. 'Mmm... I love lilacs.'
1 Polyester's tagline was, aptly enough, 'Smelling is believing.'

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