I’m not sure what other people do with their tiny scraps, but I can’t let anything go to waste. These are some walnut hardwood and maple veneer scraps that I turned into gift tags. (I didn’t have a banana handy, so I used a SIM for scale.)
As a computer science guy, I use a greedy algorithm. I regularly cut lots of different shapes and I try to minimize the amount of scrap based on the shape used. If I must have scrap, I try to maximize the size of the scrap.
In my scrap photo, you can see the rectangle that I cut out for the word “Hack”. All I had was a narrow strip that was a little too small for most of the shapes I cut. And the circles used for “Joy” were the unused middle discs from some large rings I had previously cut.
(And yes, I have a jar full of little stars from the cut-out holes that are in need of a project.)