Cookie is small information stored in text file on user’s hard drive by web server. It contains personalized user data or information that is used to communicate between different web pages. Cookies are the user’s identity and used to track where the user navigated throughout the web site pages. Cookies are generally written on user machine with two types: Session cookies and Persistent cookies.

Cookies can be used in the following applications:

1. To implement shopping cart

2. Personalized sites

3. User tracking

4. Marketing

5. User sessions

However, cookies also have drawbacks:

1. If user has set browser options to warn before writing any cookie or disabled the cookies completely then site containing cookie will be completely disabled and can not perform any operation resulting in loss of site traffic.

2. Too many Cookies

3. Security issues

4. Sensitive information

Source: http://www.softwaretestinghelp.com/website-cookie-testing-test-cases/