Refers to Mario's Cape and Doctor Mario's Super Sheet (forward B), known to be one of the most versatile moves in the game. The cape can reflect projectiles and spin characters in the opposite direction (even if they're shielding). The Cape deals 10% damage standard and has no knockback, which means it does not interrupt attacks, only turns the enemy character around. This can leave recovering characters unable to grab the ledge.
Cape can also be used as a verb, i.e. "I just caped that Marth's recovery and won the tournament!"
Caping a character at the ledge may also be referred to as "shaming" your opponent.