Cut a piece of yarn about 12 inches long. Fold the yarn in half and push through the center hole on the bead. Knot the two ends together so the bead cannot come off.
Fold over the top of the gift bag and punch a single hole through both the top and the folded-over edge.
Put the folded end of the yarn through the punched hole, loop over the top of the bag and pull the end with the bead through the loop. We put it through the loop twice for a more elegant effect.