A heat-transfer label assembly and an apparatus for applying heat-transfer labels. In a preferred embodiment, the heat-transfer label assembly includes a support. A plurality of labels are positioned over the support for transfer from the support to an article, each of the labels including an ink design. A plurality of spacers are positioned over the support but not over the label, the spacers not being transferable with the labels from the support to an article. The distance from the top of the spacers to the support exceeds the distance from the top of the labels to the support so that, when the assembly is wound into a roll, the labels do not come into contact with the bottom surface of an underlying portion of the support. In a preferred embodiment, the apparatus for applying heat-transfer labels includes a pad, a die-mark reduction device on the pad, a heated die positioned over the pad, and a motor for moving the heated die into and out of engagement with the die-mark reduction device. One type of die-mark reduction device has a top that includes a plurality of recesses spaced apart from one another, the recesses constituting non-contact areas with the die, the spaces between the recesses constituting contact areas with the die.