Before you rip or do anything drastic, use either green or black sewing thread and hand quilt through all layers as close to the letters as you can. Quilting is not smooth as the desert, there is always a puff of cloth between the stitching. Perhaps this will take some of the wrinkles out. You could quilt it with your machine as close as you can but hand quilting would work better. If you don't like it, consider some of the other options.
One project I bought called for hand quilting without a hoop to make the whole thing puffier and it worked. Some wash a hand quilted item for the wrinkles, supposed to look old, I guess.