First, I start by cutting out the amount of fabric I need for the bag (big rectangle), turning it right sides together, and sewing 3 of the 4 sides together, leaving the top open. I leave 1 1/2 inch of one of the seams open at the top. You'll see why as I continue.
Next, I fold back the seam above the opening, and sew it like this:
Now, all I need to do is fold back about 3/4 inches at the top and sew 1/4 inch from the raw edge, to form a casing for the draw string. The last step makes a nice finished edge for the casing opening.
Now I use ribbon (that I bought on clearance Dec.26th, along with the Christmas fabric) to thread through the casing.
Secure them with a knot or bead, add a gift tag, then you're ready to go! I've been using my bags for many years, and can't remember the last time I bought gift wrap. They fold and store easily with all of the Christmas decorations.