Dryer sheets are small pieces of polyester or other synthetic fiber, about eight inches wide by six inches long, that are coated with a surfactant to reduce tension. The most common surfactant used is stearic acid, a fatty acid most commonly found in animal tallow. This allows the dryer sheets to reduce static cling on your clothing. To understand how, it's first important to note why static cling occurs.
It’s electric
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So why does clothing stick together when you pull it out of the dryer, causing the occasional sock to fall off your pants during an important business meeting? It's all due to static electricity. When the clothing gets bumped around in the dryer it rubs up against other clothing. The result is a transfer of ions, which makes some of it positively charged and some negatively charged. The oppositely charged clothing attracts each other, and voila, the sock and the pants stick together, crackling and possibly shocking you when you pull them apart.
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The dryer sheet’s job
The dryer sheet works to stop this from happening -- although it is not really the sheet doing the job, but rather the material the sheet is coated with. The stearic acid or other surfactant melts in the hot dryer and transfers from the dryer sheet onto the clothing. The newly lubricated clothing has less friction than before and can slip and slide against other items with less risk of static occurring. The fat molecules also bond with negatively charged ions to neutralize them or turn them positive. Hence, the articles of clothing are no longer chemically attracted. The sheet is also said to "soften" the items, since a layer of surfactant stays on the clothes after the dry cycle is complete. Some dryer sheets also add scent in this same fashion.
Problems
Since the surfactant stays on the clothing after it's ready to wear again, dryer sheets can pose a problem for people who have skin allergies. The sheets can also negatively affect the absorbency of towels and the flame retardant treatments on children's sleepwear. Some also contain toxic chemicals, such as pentane and chloroform. If you look at the typical box of dryer sheets, it can be difficult to determine what the ingredients are. Most say something like "biodegradable catatonic softeners." If you or a family member has any sensitivities, contact the manufacturer. It's better to have a little static than a serious health problem on your hands – or gloves.