I use Microsoft Publisher. I typically make them 2"x4". Print them on Printed Treasures fabric. I have tried other types of printer fabric, but they faded badly when washed. Printed Treasures seems to be the best. I bought a book of labels, scanned them, colored them in PhotoSuite. I add name of the quilt pattern, for whom (if there is a specific recipient), my name, where I live (city and state), date (month and year) and a graphic that compliments the quilt top. Two sides are stitched into the border and the other two are hand stitched (that way I only need to sew down 2 sides - I hate hand stitching). I've attached a couple of labels that I have done. These two labels were made for quilts that my niece made. The rubber ducky was scanned from the fabric, tweaked and saved as a jpg. The larger one was scanned from the label book and colored in PhotoSuite.
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Dolly in MI