It's a fact of flying that airlines lose bags. It's not pleasant and it shouldn't happen but it does and we always want to know how and why did the airline lose my bag. There are three errors that can happen during baggage handling: human error, mechanical error, user error; and those errors can come around for multiple reasons.
Human error happens when an employee handling the bag makes a mistake:
Rushing 1.1: Sometimes a check-in agent will be rushing and will check in or tag the bag under the wrong passenger. This can happen when the names of passengers are the same or similar enough that they look the same at a quick glance. This is why it is always a good idea to check your boarding pass and baggage tag to make sure that it is registered under your name.
Rushing 1.2: Ramp agents who handle the bags in the baggage hall and on the ramp can also be rushing, especially if there are staffing shortages or irregular operations. In that case they may make errors when two destinations have similar codes. This is especially bad in Canada where we have many similar airport codes like YYZ for Toronto Pearson Airport and YYG for Charlottetown Airport.
Bag not Checked Through to Final Destination: This can happen when you are flying two airlines that do not have an interline baggage agreement. In that case you will need to collect your bag on the carousel and check it in again. Another way this can happen is if an airline asks for volunteers to check their carry-on bags for free at the gate and the agent doesn't write your connecting flight on the tag. Always make sure that your bag is tagged to your final destination.
Laziness: This happens when ramp agents don't care to do their job properly. It's not very common and mostly results in bags being left at the originating station because they come down right at flight closing time or are left off the baggage cart or on the cart when being loaded on the plane.
Mechanical error happens when there is a problem independent of human involvement.
Tag Falls Off: Baggage tags can fall off occasionally and when that happens it can take from hours to days to figure out who the bag belongs to. This is a reason why you should always have your name on your bag and no one else's and why it is a good idea to keep your destination address on it as well. It speeds up the process of recognition. It can also be a good idea to put what airline you are flying on the bag as that will narrow down how many flights need to be checked by the airport agents.
Baggage Belt Breaks: If the baggage belt that brings the bags from check-in to the baggage room breaks or stops for any reason the bags on the belt may end up in a non-accessible area (for ramp crew) or just be so far away that they don't make it in time for your flight. This is one reason why it is good to check your bags early.
Bag Falls off Belt: Sometimes a bag will fall off or get stuck on the belt. In this case it may not be noticed for some time.
Flight Delays: When a flight is delayed and a passenger has a connection to make it may happen that there just isn't enough time to transfer the bag from one aircraft to another.
Weight Imbalance: Sometimes an aircraft can become too heavy. This happens during holidays when people bring more bags that expected with them. In this case, for safety reasons, bags will be taken off the flight and put onto the next available flight going to their final destination.
User error happens when the passenger (you) makes a mistake when checking in their bag.
Old Tag on Bag: Sometimes you forget to take an old tag off of your bag. In this case, if it isn't noticed by a check-in agent (for example the handle that it is on is facing away from the agent or is on the bottom of the bag) then the two tags can get mixed up. Ramp agents don't check for two tags and will follow instructions from the first tag that they see. This is why it is always a good idea to tear the tag off the moment you arrive at your final destination.
Bag isn't Checked In: sometimes passengers drop their bags off at the connecting belt without checking them in. This can happen when transferring between airlines without an interline bag transfer agreement or because the passenger has made a mistake. In that case the airline doesn't know that you have a bag at all and won't put it on the plane.
You Forgot to Collect your Bag: This happens in two instances: when you need to collect your bag and re-check it in during a connection and when you use a gate check or sky check service. The first is related to bags not being tagged through to the final destination but can also occur in countries where you must clear immigration with your bag at point of entry. In that case just ask the airline agents at the arrival airport, they will have the most up to date information on customs regulations concerning you. In the second case this happens from ignorance. Certain airlines will take larger carry-on bags at the door of the aircraft and put them in the hold of the plane because the overhead bins are smaller than normal or because there are more carry on bags than are able to fit into the overhead bins. This usually happens on smaller aircraft. In this case the bag is returned to you at the door of the aircraft upon arrival. If you don't pick up your bag at the door it may get confused with the outbound bags and, because these bags don't have tags, it will end up lost. If ever in doubt about where to pick up a bad just ask the arrivals agent upon exiting.
Sometime there is nothing you can do about a delayed or lost bag, life happens, but you can try and mitigate certain problems. You should always plan to be at the check-in desk half an hour before it closes or more just in case there are any problems. Always check to make sure that the baggage tag on your bag is current and made out to the correct name and correct destination. Lastly, always make sure that your bag is indeed checked in and if you have any doubts ask an agent who works for your airline. Other agents simply don't have guaranteed information on that and aren't liable in case a mistake is made.