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Double envelopes create an extra special experience for guests when they open your wedding invitations. In addition, they also serve several practical purposes. First, the inside envelope is a great place to specify exactly who is invited (great for when you want to be clear about whether or not kids or a date are included). Second, they offer another level of protection for the precious cargo inside, and while the outside envelope will likely get soiled in the mail, the inside envelope will arrive clean and blemish-free. Third, an inner envelope is a great place to include a wax seal to eliminate risk of postal machinery or less than careful handling creating damage.
Your outer envelope is where you should include the guests' street address and formal names(s) of the main recipient(s). On the inside envelope, it's traditional to include the name(s) of each invited guest (or "and guest"), and if you'd like, you can use a less formal style for these. Some couples even choose just to print guests' first names on the inside envelopes - the choice is up to you.