Answer
Permanent set occurs when the spring is compressed to a height where the internal stresses exceed the material's yield strength, causing plastic deformation. It is measured by comparing the Free Height ($L_0$) before and after a 'solid test' (compression to solid height or a specific load). If the new $L_0$ is significantly lower, the spring has set. This is often caused by selecting a material with insufficient tensile strength for the required deflection or by accidental 'over-travel' in the assembly. To prevent this, designers must ensure that the stress at the maximum possible deflection (even during installation) does not exceed the elastic limit of the alloy.