A flue is basically a long vertical pipe from your furnace to the roof. The damper acts like a valve to close off the flue or open it fully. Manual dampers on fireplaces require you to push the damper closed yourself, but many furnaces have automatic control for effortless control over the damper.
During furnace operation, the flue must be open. This releases the toxic byproducts of the combustion process that takes place inside your furnace. If you leave the flue closed while the furnace is firing, carbon monoxide will build up in your home, poisoning you and your family. For this reason, you need a carbon monoxide detector if you own a gas or oil-fired furnace in your home to alert you if odorless and colorless carbon monoxide leaks from the furnace.
Temperature control is the main reason for closing the flue in the winter, and critter control is the reason for closing it in the off-season. Even in the winter, your furnace is not always on. It cycles between firings to reach and maintain the temperature you set on the thermostat. During the times between firings, closing the flue prevents heat from the system from escaping through the flue. This makes your system more efficient. For shutting off the flue between firings, you will need an automatic damper system. During the summer, when the furnace is not in use, closing the flue prevents nesting animals from crawling down the flue and into your furnace.
Automatic damper systems use an electric system to detect when to close and open the furnace based on when the furnace is firing. For older models with a standing pilot light, the flue should never be completely closed. Automatic systems will leave 10 percent of the flue open to provide venting for the pilot light.