Etymology
Cachet means "stamp" or "seal" in French. This refers to an added design or text that marks the outside of a postcard or envelope.
Source
The Post Office or one of its foreign representative bodies can officially issue cachets. Occasionally, private parties will issue their own cachets to represent a specific event or memorial.
Function
Cachets most commonly correspond to the special circumstances under which the item was mailed. These can be the first issue, last issue, an exhibition or another special event/commemoration. They can also mark official approval or indicate prestige.