Here's how we've done it:
1. Pass the rubber tie through your luggage handle, then through the hole in the tag.
2. Hold both ends of the rubber tie (the luggage handle and tag will be between the ends).
3. Take the end of the rubber tie that was NOT passed through the luggage handle and tag - pass it OVER the luggage handle, OVER the tag, then THROUGH the other end of the rubber tie. Pull it tight (you can release the other end of the rubber tie).
4. Continuing to hold the end of the rubber tie you just passed through, open the end wide enough to pass it OVER and AROUND the entire tag. Pull the tag through as far as you can.
Good luck!