In a past post I showed my custom hangtag, which gives washing instructions and shows the yarn content. When I started making sweaters, I was bothered by the fact that there was no label, like normal clothes would have. I began looking into ways I could get a custom tag made at an affordable cost.
Turns out, the cheapest and nicest option I found was getting a custom ribbon made. Usually these are used for weddings or parties, but if you order a roll for your tag, you can just snip one off at a time and sew them in place. There are lots of color and font options as well and mine happens to have the decorative loops along the edge.
One tip that helps is to slightly coat the edges with some sort of Elmer's Glue so they will not fray once cut from the roll. Then I sew each edge under to give it a neat look, and sew it into the piece, being careful not to let those stitches show though to the back of the sweater. These would also be nice for the corner of a scarf or blanket as well.
Check out www.namemaker.com for a really good selection. I chose the 3/8" satin loop edge shown here. You can often find coupons online for this company as well, so my order ended up costing about $17 including shipping.