Help: Schnauzer is scratching at the collar and making her neck red...

Recently in my city an apartment complex burnt down and the next day there were 3 dogs that went missing from the fire (they have not concluded that they perished in the fire. The fire dept is giving hope they ran away) this gave me a wake up call that even though we live in a home and my doggies are indoor I really should have a collar on them JUST IN CASE... however my schnauzer, who already had skin issue for being pure white, is scratching at it and getting red underneath :( it’s not tight, I can put 2 of my fat fingers between, and it’s not loose, it doesn’t spin around constantly. I think she’s just not used it... any tips? It’s cotton too and I wash it with sensitive soap. Thank you!