A heat activated transfer is formed having a lower thermoplastic or thermoactive adhesive layer, an upper transparent thermoset layer and indicia. The indicia is formed from sublimation dye or diffusion dye which is heat transferred into the thermoset material, preferably as the heat activated transfer is being applied to a cloth substrate. This permits printing and application of individual unique indicia on each individual heat activated transfer at a very low cost. Due to the extreme clarity of the formed product as well as the ease by which different unique indicia can be provided with each heat activated transfer, this method and product is uniquely suitable for use in preparing coated machine-readable indicia such as bar codes. This permits inventory control for cloth items such as hospital garments, linen and the like. It also permits uniforms and the like to be marked with the individual user's name at a relatively low cost.