Luggage tags perform three functions: Providing identifying information so airline officials can return a lost bag to you quickly, differentiating your bag from all the lookalikes around it, and confounding travelers who can't figure out how to attach the thing to a piece of luggage. The trick is to girth-hitch the luggage tag to your suitcase, duffel or backpack strap, or spinner luggage handle. Even if it looks like the tag's strap isn't long enough to allow this, it'll stretch to accommodate the tag.
Attach the Loop to the Tag
Attach the loop to the luggage tag -- if it isn't already attached -- with a simple girth hitch. Slide one end of the loop through the hole in the luggage tag. Pass this end of the loop through the other end, and snug the resulting hitch down against the tag.
Attach the Tag to the Luggage
Attach the free end of the tag's loop to the luggage handle with another girth hitch. Slide the free end under the bag handle so it pokes out the other side. Push the luggage tag through the far end of the loop, which will stretch to accommodate it.
Consider a Backup
Even a sturdy luggage tag can sometimes break off during transit or as a result of rough handling. Consider slipping an index card inside the luggage, with contact information written on it with a permanent marker, as a backup.