festival on August 16, people do Okuribi or "send-off fire" ceremony.
It signifies the moment when the spirits of deceased family members, who are said to visit this world during OBon, are believed to be returning to the spirit world.
In my home town, people put expired Ofuda in an old rice cooking pot, then set fire on them.
The Ofuda is customarily renewed annually before the end of a year, and then attached to a door, pillar, or ceiling. It may also be placed inside a private shrine. It is believed to protect the family in residence from general harm, such as a disease.
A portable form of Ofuda, commonly called Omamori is typically wrapped in a small bag made of decorated cloth.