Replacement cards cost a dollar or a lunch period's worth of work for us. This could them be used to confirm that they are indeed who they say they are if you wish to check out to those without the card. I have been burned too many times by students checking out material under a false name to to do it without the card and the confirming bit of information. Hope this helps. We keep all library cards on a Rolodex at the circulation desk.
Kids seem to appreciate having their cards in the library.
We do our library registration on the general school registration day and the photographer takes 2 pictures - one for their ID and one for us. Has worked very well for us. We are pretty strict about students having their ID cards to check out materials. We do not require showing ID to enter, as our circ desk is too far from the entrance for this to be practical. If you check out the book then you are responsible for it.