Usually when you send email to a valid address, your message is appended to a file (or stuck into a database) that represents your friend's mailbox. Now if someone sets up an autoreply, the mail goes into a program instead. (It may or may not go into a mailbox as well.)

The autoreply program picks your address out of the header, and sends you a canned reply. Some autoreplies are smarter than others, and they might scan your email (or at least the Subject line) and find a canned response chosen specially for you!

Useful when you're on vacation, so co-workers and friends know why you're not replying to your mail.

Bad when you're on a mailing list! Because if the mailing list program is not very bright, it won't filter out your autoreplies, and you can have an infinite email loop that constantly doubles (because you reply to your autoreplies). Most email lists nowadays filter out autoreplies, or have Reply-To headers set to the original sender (so your autoreply doesn't go to the list). Also, a good autoreply program will not reply when its own work comes back to them.

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