“Memory Effect” is a condition of reduced battery performance (and eventual failure) due to a battery only using those cells that are fully discharged and charged on a regular basis. In other words, if on a regular basis a NiCd or NiMH battery is only partially discharged before being recharged, it ” forgets” that it has usable capacity to further discharge all the way down. The result is degraded battery performance and shorter battery life because the battery is using less than it’s true full capacity.
Li-ion batteries do not develop the “memory effect”. NiMH batteries, while considerably better than their NiCd counterparts, are prone to developing “memory effect.” However, proper care and conditioning over the life of a NiMH battery will significantly reduce the potential negative impacts.