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Jackie, I use OESCO font on the back of caps if I can as it will sew nice even at .15 size. How big depends on the style of cap ( fitted or adjustable) and how many letters you need to put there.
I usually will not go over 1/2" but keep it mainly about .35 in height. I use several fonts and try and keep it the same font as the front if there is text in the front.
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