I've been working on the design for a few art-objects that need laser-cut letters, and decided it would be good to prototype some letters first, to get a sense of what's required. There are a lot of "stencil fonts" out there to be had for free, but a lot of them are pretty limited stylistically so I have been working with creating "laser-safe" versions of other more decorative, less industrial fonts. In this case, I am using Zapfino.
It started with a present for my father, then a present for a friend, and a wedding present, and this example is based off of a package of fashion show schwag that I gave to someone. It seemed a great opportunity to test out a few techniques, and the result was a stylish success. In fact, the usefulness of having a laser or stencil-friendly version of a font was so novel, I started working on an OpenType version called Stencilano that is available for free beta download now.
Also, a laser cutter is nice, and very effective, but after altering type in the way I've outlined here, you could cut the letters out by hand. It would take a very sharp knife, a very steady hand, and a lot of patience, but it's a nice alternative since not everyone has access to laser cutting equipment.
Here are all the steps I took to alter the letters and package my gift.
Warning: This technique may impress your boy/girlfriend.
1) A vector-based graphics program. Inkscape is a great open-source vector program. You can also use CorelDRAW or Adobe Illustrator. I'm going to use Illustrator's interface for this example.
2) Some kind of gift-wrap to wrap your gift in. I used a brown craft paper.
3) Some stiff card stock. I used plain manila, which looks nice and clean against the craft paper.
4) A laser cutter.
5) An exacto knife.
6) A present to wrap.
Step 1: Selecting and Generating the Type
1. Open Illustrator. It will be helpful to set your document size to match the size of your laser cutter's print range.
2. We need to make a rectangle that will define the edges of our gift-tag. Use the Rectangle tool, and make a rectangle that is 1 in. smaller than the largest face of your gift in each dimension (if you don't have your rulers turned on in Illustrator, do so by hitting Command-r. It will help).
3. Select the Rectangle and give it no fill with a 1pt red stroke (making it red will be important later).
4. Now it's time to pick and type the letters. Zapfino is a really good font to use, not only because it's super-classy, but also because the strokes are often very thin, making it easy to "cut to the counters".
Counters are the isolated white spaces inside letters. Most fonts have them, but when cutting what is essentially a stencil, the paper will fall apart if we leave these in. But we'll get to counters in the next step.
5. For now, simply type your message and place it inside the Rectangle you've made.
6. Get the words centered and where you want them, then, select the word with one of the arrow tools and go to Type>Create Outlines. This will turn the text into editable vectors.
7. Leave the vector letters with no stroke, black fill.