Definition of value cut
When a player hits value cut, he thinks he is making a value bet, but in the end, he makes a bet against a hand that is higher than his own. Instead of making more money on his bet, he loses a bigger pot. This can happen when a value bet player is too "thin". For example, a player who bets flop, turn and river with KJ in hand on K-2-2-5-Q and is called on the river by AK is a value cut player. In this situation, except perhaps a hand like KT, there are few hands that will call that will not dominate KJ.
Avoid value bet thin against nits
If you're up against a "nit" (a very tight player) and you're betting on the flop, the turn and the river, you'll have to have a very good hand. Betting three times with a medium hand hoping to be called a lesser is a utopia. To avoid the value cut of you, when betting three streets, make sure you have a very strong hand or play against a player who is type calling station and calls too much.