We use a process similar to Sheila's at our church.
Each grade level has a color assigned to them -- their journals, assignment board and their nametags are all color coordinated. Colors are assigned to our age groups. This color system makes it VISUALLY EASY to know which group a child is in, WHERE they should be, and when we find their nametag laying somewhere ---WHICH BOX we need to put it back in to be carried to the next workshop next week.
We cut the tags out of colored printer paper and write the child's name on it. They can add a sticker or decorate if desired at the first class of the year. Then we slip the nametags down into plastic pocket sleeves with clips on them.
We've found that it's important (and worth the extra expense) to buy the plastic sleeves that are closed on the sides and bottom and just have an opening on the top -- otherwise the plastic comes apart and the nametags continuously fall out.
We have color coded ribbons hanging at our check-in area where the nametags get stored. The nametags clip on to the correct color ribbon. Kids pick these up as they arrive and get signed in by parents. They clip them back to the ribbon as they leave. Shepherds help remind the children and attend to any forgotten nametags.
We keep extra colored paper nametag and plastic holders in our shepherd box so that they are easily available for newcomers or for lost tags. This has worked really well. They usually last for an entire year and then I redo them before the new school year begins.