Updated October 17, 2019
Defense Primer: Military Commissaries and Exchanges
The Department of Defense (DOD) offers certain quality-
Table 1. Breakdown of Commissaries vs. Exchanges
of-life benefits to military members, their families, and
retirees. The general purpose of these benefits is to attract,
Commissaries
Exchanges
retain, and support morale and readiness for military
Funding
Appropriated Funds Sales of goods, non-
servicemembers. One of these benefits is world-wide access
(APF)
appropriated (NAF)
to grocery and retail stores—called commissaries and
exchanges—typically located on military installations.
Management
DeCA Board of
Board of Directors
Commissaries provide subsidized groceries and household
Directors
for each Service
goods to eligible patrons. Exchanges sell goods for profit,
exchange system
similar to a department or specialty store, but use the some
Products
Grocery and
Clothing, shoes,
of these profits to fund various Morale, Welfare and
household goods
uniforms, furniture,
Recreation (MWR) activities (See Table 1).
computers, alcohol,
Organization and Management
cigarettes, jewelry
Defense Commissaries
Online Sales
Limited*
Yes**
The modern commissary system began in 1867. Each of the
and Delivery
services operated its own commissaries and exchanges until
Sources: “About DeCA” and “FAQs” at
1991 when the commissary system was consolidated under
https://www.commissaries.com/; and “Exchange Quick Facts,” at
the Defense Commissary Agency (DeCA). Currently,
https://www.aafes.com/about-exchange/exchange-quick-facts/.
DeCA operates 237 stores worldwide including 178
stateside, 13 countries and 2 U.S. territories.
Notes: *In 2013, DeCA started a pilot program offering online
ordering with curbside pickup, known as Click2Go, at three
As a defense agency, DeCA reports to the Office of the
locations: Fort Lee, VA, Offutt Air Force Base, NE, and Travis Air
Secretary of Defense and has a board of directors composed
Force Base, CA. The pilot end on June 1, 2019. DeCA plans to bring
of members from each of the military services. DeCA
a new Click2Go to the original pilot instal ations at a later date.
provides subsidized groceries and household goods at cost
Currently, a new Click2Go is available in Virginia at three locations:
plus a 5% surcharge. This surcharge is used to fund new
Fort Belvoir, Fort Eustis and Oceana NAS. Additional Click2Go
commissary construction, and store-level refurbishment,
locations are expected in the future. At this time, it is unknown
maintenance, and equipment.
whether DeCA wil offer delivery of online orders. **Online
exchange delivery excludes cigarettes, alcohol, and military uniforms.
Military Exchanges
See https://www.commissaries.com/shopping/click-2-go.
DOD maintains an exchange system that includes the Army
and Air Force Exchange System (AAFES), the Navy
Authorized Patrons
Exchange (NEX), and the Marine Corps Exchange (MCX).
Authorized patrons of military commissaries and exchanges
Each service has its own board of directors to align
include active duty, Guard and Reserve members, military
operations and services. These exchanges provide military
retirees, Medal of Honor recipients, 100 percent disabled
installations with goods and services similar to department
veterans, and authorized family members. DOD regulations
stores and are often located near commissaries. Some
also allow limited access to overseas commissaries to DOD
exchanges also operate gas stations, mini-marts, food
and non-DOD federal civilian employees and contractors.
courts, barber and beauty shops, and liquor stores, some of
which are operated by outside or contract vendors.
Since November 11, 2017, DOD has allowed limited online
exchange shopping privileges to all honorably discharged
According to AAFES, “20% to 30% of its foot traffic,
veterans. Purchases of uniforms, alcohol and tobacco
representing $1 billion in sales, is attributable to proximity
products are excluded. Veterans may verify eligibility at
to commissaries.” DOD regulates what items may be sold at
https://www.shopmyexchange.com/veterans.
commissaries and exchanges to comply with statutory
requirements (10 U.S.C. §2483) and to avoid direct
The John S. McCain National Defense Authorization
competition with one another.
Act for FY2019 (P.L. 115-232) includes a provision
that is to extend eligibility for commissary and morale,
welfare, and recreation (MWR) privileges to certain
veterans and veterans' caregivers by January 1, 2020,
subject to regulations prescribed by DOD.
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Defense Primer: Military Commissaries and Exchanges
Funding
benefit for eligible patrons (particularly military retirees
Commissaries: Appropriated Funds
who may be on a fixed income), could harm recruitment
DeCA is an appropriated fund activity (APF). Congress
and retention, and could reduce the revenues generated for
funds commissary operations with an annual appropriation
MWR activities. Advocates for the commissary and
to the DeCA Working Capital Fund (WCF). According to
exchange systems also note that they provide job
DeCA’s FY2018 Annual Financial Report, its operation
opportunities for military spouses and other dependents.
costs were $1.3 billion. By law (10 U.S.C §2483),
Those who have proposed a reduction or cancellation of the
appropriated funds may be used to cover employee salaries
commissary subsidy argue that the current benefit is not
and wages, utilities, communications, operating supplies
efficient or equitably distributed among eligible patrons and
and services, food shipment to overseas destinations, and
that running a chain of grocery stores is not a core function
other management, equipment, and/or information
of DOD. Some military personnel are assigned to locations
technology costs. In FY2018, DeCA had over 13,000
without convenient access to a commissary. In particular,
employees and served 5.4 million authorized households.
military retirees and Reservists may be less likely to live in
close proximity to an installation with commissary services.
Table 2. DeCA Appropriations FY2014-FY2019
Further, with the expansion of discount grocery stores and
Fiscal Year
Amount in Billions
grocery delivery services, the commissary benefit may not
be as attractive as it once was. One alternate proposal is for
FY2014
$1.3
DOD use the savings generated from a reduction in the
FY2015
$1.3
subsidy towards an annual “grocery allowance” for active
duty military families that could be better targeted to
FY2016
$1.3
specific pay grades with higher need (i.e., junior enlisted).
FY2017
$1.4
Proponents for consolidation contend that merging all
FY2018
$1.4
systems into a single Defense Resale Activity could save
FY2019
$1.3
money by streamlining functions such as accounting,
administration and support; allowing for greater flexibility
Source: Overview - FY2019 Defense Budget, Figure 5.1 Pay and
of products sold; and aligning incentives for commissaries
Benefits Funding (Commissary Subsidy), on p. 5-3 at
and exchanges.
https://comptrol er.defense.gov/Budget-Materials/Budget2019/; and
Section 627 of the FY2019 NDAA required DOD to study
earlier Budgets at https://comptrol er.defense.gov/Budget-Materials/.
the feasibility of consolidating commissaries and exchanges
into a single defense resale system. The study, Department
Exchanges: Non-Appropriated Funds
of Defense Report on the Development of a Single Defense
Unlike commissaries, exchanges sell merchandise for profit
Resale System, April 29, 2019, concluded that the benefits
similar to retail or department stores. In FY2018, AAFES
of consolidating the two systems outweigh the costs. The
reported that it generated over $8.7 billion in annual
study projected net savings of $700 million to $1.3 billion
revenue and $386 million in dividend-eligible earnings.
of combined appropriated and non-appropriated funds over
These dividends are paid into the Services’ Central Welfare
the first five years, with $400 to $700 million in recurring
Funds, which cover operating expenses, maintain facilities,
annual net savings afterward.
and, fund MWR programs and services such as leisure
travel, fitness centers, Child Development Centers, youth
Relevant Statute
programs, outdoor recreation, and movie theaters.
Title 10, U.S. Code Chapter 54
Commissary and Exchange Reform
Title 10, U.S. Code, Chapter 147
Proposals
Over the past few years, Congress has been concerned with
improving DeCA. Recent reform efforts by the Congress
CRS Products
generally have sought to explore ways to reduce DeCA’s
CRS Report R45343, FY2019 National Defense Authorization
reliance on appropriated funds without reducing patrons’
Act: Selected Military Personnel Issues (and prior-year reports),
commissary benefits and/or revenues generated by military
section on “Defense Commissary System.”
exchanges. Some of the past proposals from military
CRS In Focus IF11233, Defense Primer: Defense Working Capital
commissions, think tanks, or legislative agencies have
Funds, see section “Select Defense-Wide DWCFs.”
included one or more of the following:
Reducing or cancelling the commissary subsidy;
Consolidating the commissary and three exchange
Other Resources
systems into one entity, to be called the Defense Resale
DODI 1330.17, DOD Commissary Program
Activity (DeRA);
Expanding commissary and exchange eligibility to
DODI 1330.21, Armed Services Exchange Regulation
additional veteran groups; and/or
DODI 1015.10, Authorized Patronage of Military MWR Programs
Charging user fees for certain categories of patrons (e.g.,
DOD civilian employees).
Military, retiree, and veteran service groups have generally
Kristy N. Kamarck, Analyst in Military Manpower
opposed any reduction to the commissary subsidy and
Barbara Salazar Torreon, Senior Research Librarian
advocate for maintaining the current system. They are
concerned that changes could dilute the perceived or actual
IF11089
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Defense Primer: Military Commissaries and Exchanges
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