I used to think "weer" in the song Mama Weer All Crazee Now was Slade's idiosyncratic spelling of "were", in Black Country dialect (which I am allowed to make fun of because my family originally came from there): "My mother weer a bit croizy, loike." It turns out, more prosaically, to be Slade's idiosyncratic spelling of "we're" as in "Mother dear, we are all rather eccentric these days." If only they had used an apostrophe, the meaning would have been clear.

It's easy to smirk at the "greengrocer's apostrophe" – the shop that uses an apostrophe to indicate a plural ("pea's"), often omitting one when it is actually required ("new seasons asparagus") – but a small trader worried about where the next delivery of purple sprouting broccoli is coming from has got more excuse than a huge multinational business that makes a profit of £1bn a year.

Tesco, Britain's biggest supermarket, is in a class of its own when it comes to apostrophe abuse. You'd think that someone among its half a million employees would know better than to put up signs saying "Kids toys". It gets worse in the clothing department: a simple "Kids" seems fair enough, but the signs nearby are a scarcely credible "Mens" and "Womens". The meaning may be clear but the sloppiness demonstrated by this insult to the intelligence of its customers makes you wonder what else the company gets wrong. Sell-by dates? Prices?

I wonder how far I'd get with a job application to Tesco if I wrote something like this: "Id really like a job at Tescos, I think its a great company, it sell's everything from kids toys to Mens. p.s I also like the BOGOF's."

The difficulties many people have with apostrophes can be explained by a walk along any high street. You might pass Boots (that's Jesse Boot you can hear spinning in his grave, although he lost his apostrophe many years ago); Waterstones (or, as it was known until 2012, Waterstone's); Sainsbury's (founded by a couple of Sainsburys, and which might therefore be known as Sainsburys', although its official name is J Sainsbury); Marks & Spencer (widely known as Marks & Spencer's); and Tesco (which has also never had an apostrophe – that may explain why it doesn't know how to use them – but, perhaps by allusion with Sainsbury's, is often referred to as Tesco's). No wonder people are confused: a colleague coined the word apostrofly – "an insect that lands at random on the printed page, depositing an apostrophe wherever it lands".

Apostrophes are, however, quite simple. Some books list as many as eight uses for them but they are just trying to confuse you: there are only three to worry about.

To indicate missing letters

I'd [I would] rather buy my own beer if you won't [will not] put your hand in your pocket.

Many pronouns are routinely abbreviated and need an apostrophe – it's (it is), who's (who is), they're (they are), you're (you are) and so on. The way to avoid confusing them with the apostrophe-less equivalents its, whose, their or there, and your is to do a quick check of the meaning: in the sentence "there are many people who count their blessings even when they're poor", "they're" is clearly a contraction of "they are" so needs an apostrophe.

Examples of abbreviated words that are sometimes given apostrophes include 'flu (short for influenza), Hallowe'en (All Hallows Evening), and Jo'burg (Johannesburg). These all look a little old-fashioned and you don't need to bother, although I have kept fo'c'sle (forecastle) in the Guardian style guide for nostalgic reasons as it is a survivor from the very first "Style-book of the Manchester Guardian" in 1928.

To indicate a possessive

His dad's quirky grammar book was top of Oliver's Christmas list.

But note that the possessive its, like other possessive pronouns such as hers, ours, yours and theirs, does not have an apostrophe: "Tesco doesn't know its onions." To confuse you further, one's does ("one knows one's onions"), but you wouldn't use that unless you wanted to sound pompous.

The term "possessive" is misleading; "association" or "relationship" would be more helpful: David might be said to possess "David's book", but hardly "David's favourite football team", although David needs an apostrophe in both cases.

If a word ends in S, an apostrophe and second S are added to make it possessive if that is how it is pronounced: James's book, but waiters' tips. If a plural does not end in S, you add apostrophe+S: children's games, people's republic, women's rights, etc.

Phrases such as butcher's hook, collector's item, cow's milk, goat's cheese and writer's cramp are best treated as singular. We either don't know or don't care whether one cow, or many, are involved.

To indicate time or quantity

This book represents a year's thought, squeezed into a month's actual work.

Apostrophes are used in phrases such as two days' time and 12 years' jail, where the time period (two days) modifies a noun (time), but not in three weeks old or nine months pregnant, where the time period (three weeks) modifies an adjective (old). You can test this by trying the singular: one day's time, but one month pregnant.

Some people say apostrophes don't make any difference. Peter Buck of REM said: "We all hate apostrophes. There's never been a good rock album that had an apostrophe in the title." (Yes, Peter, Sgt Pepper's was such rubbish compared with REM's Around the Sun.)

But consider these four sentences, where the apostrophes enable you to express different concepts with great precision:

The guitarist's friend's CD (refers to one guitarist and one friend).

The guitarist's friends' CD (one guitarist with more than one friend).

The guitarists' friend's CD (more than one guitarist; one friend).

The guitarists' friends' CD (more than one guitarist; their friends).

There are those who would put an apostrophe in plural abbreviations: CD's. All I can say to that is thank goodness for downloads. In fact unless you want to be lampooned along with all those poor greengrocers, never use apostrophes in plurals, including abbreviations: the DJ's beats were tight; the other DJs were jealous. A cafe offering "PIE'S, PASTY'S, SANDWICH'S + CAKES" does not inspire confidence. It's at times like this that I start to sympathise with those linguists who argue that apostrophes are not punctuation at all, just an aspect of spelling.

To sum up: apostrophes are the difference between a supermarket that knows its shit and one that knows it's shit; between feeling you're nuts and feeling your nuts; between "Hell mend them" (an old-fashioned curse) and "He'll mend them" (a bloke's coming round to fix your tiles).

This is an edited extract from For Who the Bell Tolls: One Man's Quest for Grammatical Perfection, by David Marsh, to be published by Guardian Faber in the autumn.