Below you will find a very long winded string of thoughts and ideas...try and stay with me I lost focus a few times while I was typing.
Okay today was the beginning of the Abuse Phase of the process. My inital findings lead me to believe that this method will not be the best [read as most effective].
I started the day by placing 3 chips in my pocket and did my best to scuff them up whenever the chance arose....and I did get a funny look from one of the guys in church!
Anyways, the transfer between the chips was nonexistent, but the on the chip edges the coloring was wearing off. It wasn't completely worn off [as shown in the picture below] but it definitely had some "missing" areas. So my first recommendation...don't carry these around in your pockets to show your buddies.
Here is a pic...
Then I went to the next stage and vigorously scuffed the edge of one chip onto the face of a non colored chip. The result speaks for itself...
This was only after 5 passes with lots of pressure. My second recommendation....don't rub the edges on the faces, especially if you plan on using them in an actual game: Unless of course your trying to create "custom" edgespots.
The next stage was submersion in water. I would have used beer, but every man has his limits and wasting beer is one of mine....even in a scientific venture like this one! Well the results weren't terrible, but I wouldn't say they were great either. After 10 seconds the color was faded. Yeah, bummer, I know. But on the bright side, I did soak the same chip for 2 min after the inital 10 sec, and dried the chip completely between soaking and the color was not faded any more. My third recommendation...don't let your clumsy drunk buddies drink beer while using these chips.
In case your monitor can't display this well enough the one on the bottom is the faded one.

Here is the link for this pic in a much larger version it is really easy to see the subtle color difference in faded one on the bottom.
Now after completeing the beginning stages of the Abuse Phase I don't want to sound negative because these tests were really much more abuse than an normal chip will endure in any given playing environment. Realistically how often would you see this kind of torture to a chip? Not very often...the only test that really shows some negative results is the water test: everyone has seen a beer spilled on the table right?
I think the other tests show that the edges of the chips will be the area of greatest concern, not the faces; and not because of color transfer but because the edges of the chips will come in contact with everything (splashed pots, shuffling, etc) and when those edges wear down and the color disappears what do you do then? I don't know.
So do these findings rule out this process, the short answer is no. The problem is getting the color deeper into the chip. I think that if the chip were heated in some way prior/during the dyeing it would help the color penetrate the surface of the chip. Also a much longer exposure to the dye may help more color adhere to the chip surface.
I honestly do think that for the person on a budget who does not need many of a certain color of chip this process would be more than suitable. Seriously I spent $1 on Kool-Aid, everything else was stuff I had in the house: clothes pins, plastic cups, H2O2, and skewers. The most "expensive" part was my time invested in the project, and I must admit that I got the opportunity to do the experiment with my nephews help, so that made the entire experience worthwhile; he is a cool kid who loves to learn! Plus I may have spawned a new generation of chip junkie!!! WOO HOO!
Another thing that makes this process suitable is the fact that 99% of the time these chips are better taken care of than most pets!!

None of us would willing allow our babies to come into harms way during a game, and even fewer would allow thier chips to suffer through the atrocities that I put these chips through today!!
My last thought on this dyeing method is this....if you only need a handful of a certain color/style of chip and if the people using them show/handle the chips with respect they will last a very, very long time. {And honestly with all the chip addicts buying and selling sets on this place how many years will it be before you get another set?

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I will continue to make these few proud soldiers suffer while batter them throughout the remainder of the week and then I will post any new findings I have.
Thanks for reading through this long winded mess! I hope it is helpful in some way to you!!
Here is a slideshow that includes all the pictures I have taken through the Abuse Phase of the project, in case you were really really intrigued by all of this!
http://s2.photobucket.com/albums/y22...1174263105.pbw
*EDIT* Sorry those images were so large! I thought they would be much smaller, like the previous ones in this thread!