Where I work, my co-workers are always ordering out for lunch. I save their bags and now have many (perfectly good) small to medium sized, brown shopping bags.
One day I needed a gift bag – but did not have the right size. So, I went into my sewing stash and found a piece of decorative fabric. Using fusing web, I fused fabric to the front of the bag – across the bottom, then up the other side of the bag (from handle to handle). The sides of the bag I left alone.
I then used some leftover lace I bought in a garage sale and my hot glue gun and glued some lace around the top of the bag (under the handles to hide the edge of the fabric). Used some leftover raffia to make a pretty bow, hot glued that on to a corner. Added some buttons here and there for decorations.
My girlfriend enjoyed the bag more than the gift it contained!
If you get small brown-paper shopping bags from the Chinese restaurants. and they are clean (no oils or food spills), just air them outside for a few hours and any odors will be gone!