A few years ago, Chip's sister gave us a gift wrapped in a bag made out of Christmas fabric that she'd purchased at her church bizarre. I thought it was a cool idea and it was the perfect size to use for a travel pillow pillow case. (My children have all used a travel sized pillow from about 8 months old until they move into a BIG kid bed.)
This year, since I'm trying to do more homemade gifts, I decided that some of our gifts would be wrapped in Christmas bags! I went to the fabric store and picked up some festive remnants. The girls helped me to sew some small bags for their hand made gifts for relatives. Although we could have made them drawstring bags fairly easily, we kept it simple and tied the top of the bag with ribbon and attached a tag. Voila! Very festive, re-usable, "green" wrapping. Plus, you can make them in a variety of sizes or patterns.
This is so easy, anyone can do it (seriously, my 4 year old was able to do this with only a little help from me). Start by ironing your fabric. Then fold under the top and bottom edges 1/4 inch and iron. Fold another 1/4 inch and iron again. Then stitch on the edge of the fold.
Fold the top to the bottom with the right-side of the fabric facing in.
Stitch along the two sides about 1/4 inch from the edge, making sure to go all the way to the top edge. Trim excess thread. Turn your bag right side out and there you go! Easy-peasy. Add gift, ribbon and tag then place under the tree.