Splitcoaststampers.com - the world's #1 papercrafting community
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You stamp, color, cut out, and then put in the oven or use your heat gun to shrink it. Some recommend sanding - I don't and haven't had any problems. Also, you can buy shrink plastic that you print on your inkjet and it works great.
Over here it's called shrink plastic, but I've noticed more people on SCS refer to it as Shrinky Dinks. You'll probably come up with more results if you use that in your search.