I re-use gift bags all the time.
I can’t imagine I’d recognize one that I’d sent out last year and got back this year, honestly!
The Japanese use pieces of fabric to wrap at least some gifts in, and the Japanese government encourages this. It’s called furoshiki and some of the wrapping styles are quite ingenious.
I can wrap presents in paper quite beautifully. But I’d just as soon use a gift bag, either of paper or fabric.
I reuse gift bags all the time, and I hope that recipients of my gifts do the same. I have no idea what gift bag I gave you (the general you) last year - feel free to reuse it for me or someone else.
I also have been known to do the hand-sewn fabric bag thing and the wrapping of gifts in fabrice swatches, depending on the person, the gift, the occasion, etc.
Frankly, it seems to me that anyone noticing the wrapping at all is sort of missing the point of gift-receiving.
Since my friend is visiting relatives for Christmas, I thought I’d give her a call today. In the course of conversation she said that she won’t mail my present (Yay! I’m getting a present! Sorry – It’s the only one I’ll be getting.) next week. I asked her if she’d received the one I sent. She checked at the door, and there it was. So I asked her how she would have felt if I’d sent it in the same bag she sent me last year. She said she would have thought it was funny. I kind of thought she would. She said that she could send my present in the bag I sent her. 