When you look at a piece of fret wire, you will see that it is made up of two different parts. The fret bead is the top of the fret that comes into contact with the strings. The fret tang is the part of the fret that gets inlayed into the fretboard. Fret tang nippers are used to cut the fret tang off while leaving the fret bead in place. You might ask why or when would you need to do that. When you refret a fretboard without binding, you don't need to cut the tangs off each end. The entire tang just gets seated in the fret slot. A bound fretboard is a different story. On a bound fretboard, the fret bead extends over the binding on each side of the fretboard. The fret tang does not. It only is inlayed in the fretboard itself—not the fretboard binding. This is where the fret tang nippers come in handy.
The fret tang nippers have a small slot for the fret bead to slide in place on edge. While the fret bead is sitting in it slot, the fret tang sticks out into the cutting shear. A fret tang nipper works the same way a full sized metal shear works-- or a guillotine for that matter. The angled blade of the shear is forced down on the metal slicing through it. The cut piece of metal drops out of the hole in the bottom of the shear. The fret tang nipper is design specifically for fret wire, so it chops off the fret tang and doesn't mangle the fret bead. It's a pretty simple design that will save you tons and tons of time.
Your fretting guitar repair bench is not complete without a fret tang nipper. Trust me. Filing down fret tangs with a file is a lot of work not to mention how time consuming it can be. The fret tang nipper with save you time and will save you the frustration of trying to clamp down individual pieces of fret wire to try to file them. Any luthier tool that will make repairs easier and save time is worth getting. If you do any fret work, I highly recommend getting one of these. If you would like more information about how to refret your guitar, please see my how to refret a guitar article.