This is a saying people use to express the idea that if you’re not paying attention, you could miss out on something important. It can be used as a joke, or in a more vengeful way.  To snooze means to sleep lightly, especially when taking a quick nap or in front of the television.

“Oh no! I forgot to record that movie on TV last night—I was too busy reading.”
“I told you not to forget!  Well, you snooze, you lose!”

 “I spent yesterday watching TV movies, and totally didn’t remember the exam we had today.  Well, you snooze, you lose, and now I won’t pass!”

So stay alert! You don’t want to find yourself hearing this expression!

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Image courtesy of Stuart Miles / FreeDigitalPhotos.net