I have a great way of making sure that borrowed pencils are returned at the end of class. I start with a clay flower pot and some green foam, the kind used in making flower arrangements. I decorate the clay pot and then cut the green foam so that it fits into the pot. I buy inexpensive artificial flowers and separate them into single flowers. I cut each flower so that it has a two-inch stem and cover the stem with tape so there aren't any sharp ends. I attach each stem to the end of a pencil, making sure that the eraser is free to be used by the borrower. I sharpen the pencils and insert them into the foam.
The students know where to borrow a pencil, and they return them before leaving class. I ask the students to donate new pencils to replenish the pot. Those students who regularly use the pencil pots are excited about having their new pencils rooted!