I'll try to explain...
take the plastic loopy thing and stick it through the slot in the tag. Then, split the loopy thing and stick it through itself again. Now you should have the tag attached to one end. Then, put the loopy thing, with the tag on it, around the luggage handle. Slip the tag end back through the loopy thing at the other end and pull tight.
I know, I know..it's really hard to describe. I can do it in about 10 seconds but to tell someone how to do it is tough.