My informant told me about this proverb and it means that whenever something feels like it is free, there is usually a catch. When we were walking around the Los Angeles Festival of Books, she had said this because a man at the Los Angeles Times Booth offered us free umbrellas that were actually very cute. However, he then told us we would need to subscribe for a two month trial for the paper and that he would be taking down our credit card information too, so we decided not to fall into the trap.
Supposedly the origin of this proverb came from when saloons and bars would offer free lunches to people to get them to come into their bars for drinks. Now I feel like the proverb is very true in our society because everything is based around advertisements and media. So, businesses are constantly telling me that they are giving away things for free, but everything also comes with a catch.