You buy a "kit" of ribbon & paper. They match each other equally so when the ribbon is finished so is the paper. To answer your question. No the paper is not inkjet. These are thermal printers and use heat to do their stuff. (Check out "sublimation" as in dye-sub)
You've seen them many times in stores & gas stations printing the reciept you just don't know it.
Take a look at some of the links in this thread and Google around and you'll see what I mean.
Snapz
Yes I am very familiar with thermal receipt printers, I own one. I knew that dye subs used a special paper but was not aware that it came as a kit with the ink.
I was just looking at some of the small portable Canon 4x6 dye sub printers and was going to try one out just to print the small 4x6. The ink and paper packs are expensive, $15 for 36 prints. Seems expensive to me.


