Over the last seven years, ink refilling has gone through some ups and downs, and as this point, it remains questionable how popular the non-OEM option will remain long term. As the service became more popular several years ago, national and regional retailers began offering ink refilling to customers in-store as a low cost option. Retailers were heavily promoting the service and refill machine manufacturers were looking for other ways to expand. Some of the most prominent advertising came from retailers such as Ace Hardware locations and Walgreens with their free refill days, aimed at growing their customer base. Companies like Ink-O-Dem found success installing machines in locations in various states at at a number of major universities. Meanwhile, franchises specializing in refills were also popping up such as Cartridge World and 123 Inkjets. In 2006, a report by Lyra indicated that office supply stores and drugstores would be the primary stations for ink refilling compared to specialty franchises.

In 2006, new retailers were beginning to install refill machines in the hopes of capturing more sales for ink supplies overall. Walgreens rolled out refill services in 1,500 stores across the US, while Longs Drugs, Ace Hardware, and Staples, and Office Depot also began offering refills. With the popular new alternative to OEMs hitting stores with lower-than-ever prices, customers paid attention. Promotions were implemented frequently driving customers to at least try the method with free refill days or $1 refill days from select retailers.

Refills were attractive for a number of reasons and primarily appealed to customers that were searching for the lowest cost alternative to an OEM. There was a considerable amount of press out at the time claiming that ink was the most expensive liquid on the planet. Some articles would compare an ounce of ink to Chanel #9 or oil to prove the high cost. The ink industry was put on the defense with the feat of explaining what justified the high cost of ink. However, this would take time and refills and non-OEMs would take advantage of the negative press around OEMs.

The growth of the refill market posed a challenge both to OEMs and remanufacturers. Remanufacturers, particularly those sold in the retail channel, claim to abide by quality standards and guarantee their products, while refills can be slightly less reliable. Store brands were arguably creating competition to their own private label remanufactured inks as store associates would offer refills as an OEM alternative.

In response, OEMs began investing more into defending their technology through Intellectual Property, as well as educating consumers. OEMs put out marketing messages defending their own products by explaining the technology behind ink cartridges and providing guarantees on high quality every single time. Many OEMs, particularly HP, commissioned studies to show that refills and non-OEM options were generally not as reliable in terms of quality as the genuine OEM product. Despite testing by the refill machine, the refill would often time not work, requiring additional interactions and efforts from the consumer to obtain the product that they need.

In the past year, Walgreens, OfficeMax, and most recently, Micro Center have removed their ink refill capabilities from stores. Walgreens, which was among the stronger players several years ago, likely saw a decline in business from refill machines. The service required personnel training and time from employees to actually do the refills, which may have proved less valuable and efficient over time. OfficeMax’s move to get out of the refill business is likely related to the Office Depot acquisition as the retailers begin to consolidate. It should be noted that both non-OEM brands for remanufactured inks are currently still available at stores. Micro Center, which is the most recent to exit the refill industry, offered a vast selection of refill capabilities for the major OEMs with the exception of Brother. It is likely that Micro Center was not generating enough business to justify the cost of operation and maintenance on the refill machine.

Prior to Micro Center’s exit from refilling, the average discount of a refill (channel-wide) compared to OEM pricing was approximately 46%. This is in relation to the non-OEM (remanufactured discount) of approximately 40%, which is not necessarily drastic enough to convince customers to take the time to refill their cartridges, which are less likely to be reliable. Interestingly, refills for Brother and Canon inks were actually higher than the average price of non-OEM remanufactured options throughout the channel, on average, moving the difference between remans and refills to favor remanufactured products. It should be noted that Fry’s Electronics and Costco maintain their refill services at this time.

With the changing prices and quality issues associated with refills, even more so than remanufactured products, it is not surprising that many regional and national retailers are getting out of the refill game. OEMs are beginning to offer more alternatives to their own cartridges including HP’s Economy inks (Staples), as well as the company’s Instant Ink program. Epson has also released its CISS products in the US market, posing competition to non-OEM alternatives. OEMs understand that they are going to have to listen to the customer and adapt their own products to appeal to the mainstream customer to combat third party competition. As for the prediction of drug stores and office suppliers owning the refill market, it appears at this point that specialty franchise locations may eventually be the only places to get refills in the future.

While a number of mainstream retailers offered the service in 2009, it should be noted that specialty franchises will likely be the only refill option remaining within the next several years.