A rubsign was a small heat-sensitive sticker that came pre-applied to Generation One toys beginning in the line's second year, 1985. They would reveal an Autobot or Decepticon faction symbol upon being rubbed. The Mini Spies were the first toys to feature rubsigns. The purpose of the rubsign addition was to help consumers distinguish genuine Transformers toys from the many knockoffs their success inspired (off-brand versions of the Dinobots, Soundwave, and his cassettes were particularly common in 84/85), as well as the Tonka Go-Bots and other competitors. A variation on the rubsigns were also used in the spin-off Hasbro/Takara toy line Battle Beasts.
By 1988, rubsigns were dropped from the line (presumably as most of the competition had been long-buried), even though several toys from that year still had molded spots for them. They would not appear again on Transformers toys until the second year of Beast Wars product in 1997, called "hidden energon chips". They continued through the next year's Fuzors and Transmetals, but were replaced by the time of the Transmetal 2s (and in the Beast Wars Neo new-mold toys) with "spark crystals".
The working part of a rubsign is a layer of Mylar plastic which contains thermochromic liquid crystals. At different temperatures, the liquid crystals' molecular structure changes, reflecting different wavelengths of light, and making a visible faction symbol appear. Mood rings work by the same principle, but have more bogus magical properties.
Generally being a somewhat goofy marketing gimmick, rubsigns were generally ignored in Transformers fictional media... until fairly recently. Dreamwave Productions, famous for their re-launching Transformers comics and generally toy-accurate artwork, featured a few posters of Transformers featuring a rubsign, and in their War and Peace series, it even appeared as a way of disguising Autobot Smokescreen's faction symbol (which had been outlawed). The current holders of the Transformers comic franchise, IDW Publishing, picked up on the idea and featured Soundwave using a rubsign to gain access to the illegal gladiatorial games.
In addition, the Decepticon Lockdown and supposed traitor Wasp appear to sport a rubsign on the new Transformers Animated cartoon, probably to indicate that the former is just in it for the parts and hunts he gets out of it , while Wasp gave up being an Autobot.