Use wallet-sized photos as gift tags
Gwen's hack is one of those gems that solves a problem AND reduces clutter at the same time. Think about this for holiday gifts as well:
When my children bring a party gift to a child who can't read yet, we don't attach a gift card to the bag. Instead, I grab a picture out of the pile of those extra wallet-size photos that you don't know what to do with, but can't bear to dump in the trash. I punch a hole in the top corner of the photo, write the child's name on the back, and attach the picture to the gift.