What is the best way to loop an extension cord to prevent damage?

Use the over-under technique (electrician’s coil) because it alternates loops to prevent twisting, which stresses copper strands and causes kinks and cracked insulation. Store the cord loosely on a peg, in a bucket, or on a cord reel—never hang it by one end on a nail. Keep it out of direct sun and extreme cold to avoid brittle jacket damage.