My idea on it, extending something suggested some time ago by another person:

When you check in you get *ONE* tag along with your boarding pass. It's got the date, flight number and your seat on it.

Put that tag on your bag so it faces out.

If someone wants to put a tagged bag up there and can't find room the FA's look for untagged or tagged to far away items and take them down to make space. If nobody claims the taken-down items they are gate-checked to the plane's destination.