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These are really easy and fun to make (and I really enjoy picking out the fabric combinations!). I made the basic bags by folding the fabric face-to-face (right side in) and hemming up the sides. Then I added the band for the drawstring by essentially making my own binding. I cut a strip of fabric that, with the short ends hemmed up, was exactly the length of the opening of the bag. I folded folded the long edges under and ironed them down, then folded the "binding" in half and pinned around the fabric all around the bag opening, and sewed it on, leaving the hemmed ends of the band/binding open for inserting the drawstrings. You could also use just piece of fabric for the entire bag, doing a rolled hem for the drawstring, like you would for an elastic waistband on a skirt. I used nice sturdy wool yarn for the drawstrings, but any type of ribbon would be really nice too.
I don't like all the waste and mess that wrapping paper can create, and this is a way to cut down on that, plus it's a nice way of enhancing a gift. And they look so nice under the tree!