Fold note in item of luggage (6)
I believe the answer is:
crease
'fold' is the definition.
(I know that fold can be written as crease)
'note in item of luggage' is the wordplay.
'note' becomes 're' (as in do-re-mi).
'in' indicates putting letters inside.
'item of luggage' becomes 'case' (I've seen this before).
're' inserted within 'case' is 'CREASE'.
(Other definitions for crease that I've seen before include "Mark made by fold" , "Furrow, wrinkle" , "Fold - wrinkle" , "iron this out" , "Where the batsman stands" .)