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Overpriced Printer Ink Costs Consumers $6 Billion Annually

Recent Study Finds Consumers Have No Effective Basis for Comparison when Purchasing Inkjet Printer Ink; Leads to Unnecessarily High Spending on Ink

WASHINGTON, Nov. 20 /PRNewswire/ -- The American Consumer Institute (ACI) urges consumers this holiday season to do their research before purchasing a home printer -- or getting one for free with a computer purchase. A new white paper entitled "Inkjet Prices, Printing Costs and Consumer Welfare," exposes pricing strategies within the inkjet industry that leave consumers at a major disadvantage and ultimately cost them an estimated $6 billion a year, collectively.

The study finds that inkjet printers are routinely under-priced to entice consumers to purchase the product. Once purchased, consumers are trapped into spending hundreds of extra dollars to operate the printers due to the high price of printer ink. This business model reflects the well known "razor/razor blade model" wherein durable assets (printers) are sold below cost and "consumables" (ink) are marked up substantially. In fact, ink is currently priced higher per milliliter than the world's finest champagne, gasoline and most luxury fragrances.

"Value shoppers" are seriously handicapped and mislead at the point of sale by the lack of information about printing costs. They pay for cartridges without knowing how much ink is in them or how many pages one will print. Consumers shop blindly due to a lack of standardized printer ink unit pricing (such as cents-per-page printed). It is not enough to look at printer cartridges' prices either, since the lowest priced cartridges often have the highest cost-of-ink per page.

"When purchasing an inkjet printer, consumers should consider the full cost of printing, the cost of the ink used to print as well as the cost of the printer itself," explains Dr. Larry F. Darby, coauthor of the report. "Free or low-cost printers are 'fools gold' when they lock consumers into using high cost ink for the life of the printer. Consumers are comparing apples and oranges as they shop for printers. It's very confusing."

Consumers would be well served by adoption of a form of truth-in-labeling to allow them to compare each printer's cost-of-ink per printed page. The paper concludes that competition in the inkjet printer and ink sectors would be much more intense if consumers were made aware of the cost implications of their printer choices. Better information means lower costs for consumers.

The study estimates that consumers would reap a sizable gain, estimated to be conservatively $6 billion per year once information-driven competition in the inkjet industry is fully realized in the marketplace. The study was conducted by TeleNomic Research with an unrestricted grant from Kodak. The American Consumer Institute received no funding for this study's release. A synopsis of the findings, consumer tips to save on printer costs and a copy of the full study are available at available at www.aci-citizenresearch.org .

About ACI

The American Consumer Institute is an independent consumer organization devoted to improving the lives of American consumers by providing information on important issues that affect them.

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