Abstract: A premium item including a sealed protective pouch having a premium object such as a coupon or sports card enclosed therein and method are provided which allow economical, continuous, on-line production of premium items without the need for individual handling of the premium objects. In the preferred method, a printed web having a backing sheet removably adhered thereto is continuously positioned on a carrier sheet having an adhesive coating, with the backing sheet in contact with the coating, whereupon the web and backing sheet are die-cut to produce a plurality of spaced-apart premium objects on the carrier sheet and a waste matrix which is then removed. A top sheet is then positioned over the premium objects with marginal portions of the top sheet adhering to corresponding marginal portions of the carrier sheet to form a continuous seal surrounding the premium objects and to form sealed protective pouches enclosing the premium objects.