I remember being able to buy pet identification tag kits which used shrink art shapes that you write your pets information on and shrink in the oven. I haven't been able to find them anymore so I grabbed some polystyrene plastic (#6), scissors, felt markers and made my own ID tags.

Step 1: What You Will Need:

Polystyrene plastic (#6 plastic or PS )* -it is the clear plastic often used in takeout containers (not the foam).
Metal hoop to attach tag to collar
Parchment paper
Coloured markers and a black fine tip marker
Scissors
Hole punch
Ruler
Toaster oven and oven mitts

*If you have trouble finding PS plastic you can just buy shrink art sheets (Shrinky Dinks) from craft stores.

Step 2: Determine Shrinkage

One important thing to know when using polystyrene is that the different plastic containers do not always shrink to the same degree. Before you start cutting out the shape for your ID tag you will need to determine the amount of shrinkage. (I have also noticed that the length and width can shrink differently causing your final product to look skewed so it is a good idea to do a test run first.)

To determine the amount of shrinkage cut a small piece of the plastic, measure it (length and width), shrink it in oven (see Step 3) and then measure the end product.

Step 3: Shrinking the Polystyrene in the Oven

Put the plastic onto a piece of parchment paper and place into a toaster oven (use with good ventilation -eg. with kitchen fan on, open a window).
Set the oven to 250 F (121C), and watch, first the plastic starts to curl, then it uncurls, then it shrinks .
The time it takes can vary, but once it uncurls and stops doing anything interesting, it is done.
With an oven mitt take out the parchment paper, if the plastic is still a bit curled, place something heavy on top, such as a phone book to straighten it out before it cools.

Step 4: Preparing the Tag

Cut
Once you have determined the size of the plastic that you will need, cut it out. I cut a basic rectangle shape with rounded edges, but you can try different shapes such as circles, hearts, a dog bone, fish, fire hydrants etc, as long as there is enough room to write the information on.

Sand
If you are using clear plastic it is a good idea to sand the plastic so it becomes opaque making it easier to read the information. A medium grit will do and sand evenly over the whole surface. If you are buying shrink art sheets you can get opaque ones (and in different colours too).

Punch hole
I just use a standard hole punch to make a hole in the top middle of the tag, double check with the measurements in step 2 that the hole will be large enough after it has shrunk to place the hoop through.

Step 5: Add Colour, Name, Contact Information, and Decorate

Colour background
On a couple of the tags that I experimented with I coloured the background, this looks really nice and stands out when placed on a white (and ginger) cat, but upon shrinking the colour darkens considerably making the writing more difficult to read. So I would recommend using lighter colours or leaving it white.

Name and contact information
The information you put on the tag is discretionary, the important thing is that someone will be able to contact you if they find your pet. The pet's name and your phone number(s) are probably the most important, you can also put on your address, and the pets medical information (if relevant) or even your own name. Write clearly and use a fine tipped marker to ensure that the information is legible after it has shrunk.

Decorate
Add embellishment if you would like. I drew hearts and flowers, fish or dog bones would be cute too (if your into cute).

Step 6: Shrink the ID Tag,

Once you have finished adding all the information and decorating your tag you can shrink it using the instructions in step 3. Larger pieces tend to curl a bit more so when it comes out of the oven place it between the pages of a heavy book to flatten it out.

Once it has cooled place the hoop through the hole and put it on your pet's collar.