I think that somebody (possibly the offshore manufacturer of said "cheap" loupe, to quote Ken) is confusing diopter with "power" here, and that it's more like a 20X loupe.
When people talk about optical "power" they typically specify it relative to the ~10" near point for a human with fully corrected vision and normal accommodation, so power = 10/focal_length. For example loupes with 1"/25 mm focal length (40 diopter) are typically rated as "10X".
If the FL is 12 mm as Ken stated then it's a 20X (~80 diopter) loupe.
As some in this thread have implicitly pointed out, the actual degree of assistance depends on the individual. Back when I was more nearsighted my near point was ~6" (though I could still accommodate to infinity), so the aforementioned "10X" loupe would have been about 6X for me. If you're farsighted then you'll get more than the stated benefit.
EDIT: I should have pointed out that I made a simplification here, that's valid at high magnifications as for loupes but not so for lower-magnification optics like bench magnifiers. It's actually power = 1 + 10/focal_length. The "+1" is to account for the contribution from your eye's optical power, again assuming normal vision and near-point. Ken's loupe is still ~20X though :-).