When I started embroidering, I noticed this same problem. An easy fix.....for stretchy fabrics, ie. knits and sweatshirts, use a medium weight cutaway stabilizer. One thickness should do it. Use spray adhesive to attach to garmet, hoop, stitch, then cut the stabilizer around the design. Should stay nice and flat for the life of the garmet. Hope this helps.

Yep, it's the tear-away stabilizer that's causing your problems.

Use a cut-away, and if there is a high cotton content on the shirts, it couldn't hurt to wash and dry them first, so if they are going to shrink, they will have done most of it before you embroider. I always wash anything with cotton before I embroider.

For polos I use a cut away mesh that's very light and shirts embroider beautifully.

hi
If you have pulled your fabric to tight it will bubble. For knits or stretch type fabrics use No Show Polymesh(nylyon). I use No Show Fusible Polymesh for the shirt. I iron it on the back (wrong side) of the shirt. This will stop it from stretching. Bring it right side out. The fusible is put where my design is going to be on the right side. I use No Show Cutaway Polymesh in the hoop. The brand I have is Sew Stable.
You can use the loopless method if you don't want to hoop. Pin, baste, spray , glue, or sticky. B.

Use a 3-mil cut away on the bottom and your good. If your embroidery puckers you most likely pulled it too tight in the hoop. Hoop the polo with a natural drape and don't stretch it. If it's a pique that should work fine, if it's jersey then be extra careful to not stretch it. If you want you might try a bit of pull compensation on the jersey knits. You can get professional backings here: http://www.embroidery-supplies.com/ (Select Our Catalog)

Another thing you might check is to make sure your design isn't to dense. Sew your design on another fabric for a test run. Ask me how I know :) lol