The collar is an heirloom of the Doo family.
A Pup Named Scooby-Doo
Scooby's parents gave him the collar as a present and although he didn't like it, he was still forced to wear it. However, it became the target of the Ghost of Buster McMuttMauler, an enemy of the Doo family, who claimed the collar was his. The Gang used it to lure the ghost into a trap, but it backfired, and the ghost got it. But thanks to Scooby, the ghost became trapped in tire swings and was unmasked as Mr. Trixenstuff, the trainer. He wanted the collar because he could sell it for a lot of money, even if it was ugly.
Scooby still didn't like wearing the collar and wanted to get rid of it by giving it to Trixenstuff the next day. Mama-Doo then confessed that Daddy-Doo always hated to wear it too, and added that since it's her son's birthday, he didn't have to wear it. Scooby thanked his mother for that.