Updated December 30, 2020
Defense Primer: Military Commissaries and Exchanges
The Department of Defense (DOD) offers certain quality-
delivery of online orders at Fort Eustis, Fort Belvoir, Fort Lee, Joint
of-life benefits to military members, their families, and
Base Charleston, and Oceana. **Online exchange delivery excludes
retirees. The general purpose of these benefits is to attract,
cigarettes, alcohol, and military uniforms. See
retain, and support morale and readiness for military
https://www.commissaries.com/shopping/click-2-go.
servicemembers.One of these benefits is worldwide access
to grocery and retail stores—called commissaries and
Military Exchanges
exchanges—typically located on military installations.
DOD maintains an exchange system that includes the Army
Commissaries provide subsidized groceries and household
and Air Force Exchange System (AAFES), the Navy
goods to eligible patrons. Exchanges sell goods for profit,
Exchange (NEX), and the Marine Corps Exchange (MCX).
similar to a department or specialty store, but use some of
Each service has its own board of directors to align
this profit to fund various Morale, Welfare, and Recreation
operations and services. These exchanges provide military
(MWR) activities (See Table 1).
installations with goods and services similar to department
Organization and Management
stores and are often located near commissaries. Some
exchanges also operate gas stations, mini-marts, food
Defense Commissaries
courts, barber and beauty shops, and liquor stores, some of
The modern commissary system began in 1867. Each of the
which are operated by outside or contract vendors.
services operated its own commissaries and exchanges until
According to AAFES, “20% to 30% of its foot traffic,
1991, when the commissary system was consolidated under
representing $1 billion in sales, is attributable to proximity
the Defense Commissary Agency (DeCA). According to the
to commissaries.” DOD regulates what items may be sold at
DeCA Annual Report for FY2020, as of September 30,
commissaries and exchanges to comply with statutory
2020, DeCA operated 236 stores on military installations
requirements (10 U.S.C. §2483) and to avoid direct
worldwide, including in 13 countries and 2 U.S. territories;
competition with one another.
and employ a workforce of over 12,000 civilian full-time
equivalents (FTEs). As a defense agency, DeCA reports to
Authorized Patrons
the Office of the Secretary of Defense and has a board of
Authorized patrons of military commissaries and exchanges
directors composed of members from each of the military
include active duty, Guard and Reserve members, military
services. DeCA provides subsidized groceries and
retirees, Medal of Honor recipients, 100% disabled
household goods at cost plus a 5% surcharge. This
veterans, and authorized family members. DOD regulations
surcharge is used to fund new commissary construction and
also allow limited access to overseas commissaries to DOD
store-level refurbishment, maintenance, and equipment.
and non-DOD federal civilian employees and contractors.
Since November 11, 2017, DOD has allowed limited online
Table 1. Breakdown of Commissaries vs. Exchanges
exchange shopping privileges to all honorably discharged

Commissaries Exchanges
veterans. Purchases of uniforms, alcohol and tobacco
products are excluded. Veterans may verify eligibility at
Funding
Appropriated
Sales of goods, non-
https://www.shopmyexchange.com/veterans.
Funds (APF)
appropriated (NAF)
Management DeCA Board of
Board of Directors for
Section 621 of the John S. McCain National Defense
Directors
each service exchange
Authorization Act (NDAA) for FY2019 (P.L. 115-232)
system
extended eligibility for commissary and morale,
welfare, and recreation (MWR) privileges to certain
Products
Grocery and
Clothing, shoes, uniforms,
veterans and veterans’ caregivers effective January 1,
household
furniture, computers,
2020, subject to regulations prescribed by DOD.
goods
alcohol, cigarettes, jewelry
Online Sales
Limited*
Yes**
On January 1, 2020, more than 4 million service-connected
and Delivery
disabled veterans, Purple Heart recipients, former prisoners
of war, and their primary caregivers were granted eligibility
Sources: “About DeCA” and “FAQs,” at
to full commissary access and certain MWR activities in the
https://www.commissaries.com/; and “Exchange Quick Facts,” at
FY2019 NDAA. See “Defense Commissary System,” in
https://www.aafes.com/about-exchange/exchange-quick-facts/.
CRS Report R45343, FY2019 National Defense
Notes: *In 2013, DeCA started a pilot program offering online
Authorization Act: Selected Military Personnel Issues.
ordering with curbside pickup, known as Click2Go. The pilot ended
on June 1, 2019. Click2Go is now available at Fort Belvoir, Fort
Funding
Eustis, Fort Lee, Fort Polk, Joint Base Charleston, Oceana NAS,
Commissaries: Appropriated Funds
Offutt AFB, Quantico, and McGuire. Additional Click2Go locations
DeCA is an appropriated fund activity (APF). Congress
are expected in the future. At this time, DeCA offers pickup and
funds commissary operations with an annual appropriation
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Defense Primer: Military Commissaries and Exchanges
to the DeCA Working Capital Fund (WCF). According to
benefit for eligible patrons (particularly military retirees
DeCA’s FY2020 Annual Financial Report, its operation
who may be on a fixed income), harm recruitment and
costs were $1.0 billion. By law (10 U.S.C §2483),
retention, and reduce the revenues generated for MWR
appropriated funds may be used to cover employee salaries
activities. Advocates for the commissary and exchange
and wages, utilities, communications, operating supplies
systems also note that they provide job opportunities for
and services, food shipment to overseas destinations, and
military spouses and other dependents.
other management, equipment, and/or information
Those who have proposed a reduction or cancellation of the
technology costs. In FY2020, DeCA employed a total of
commissary subsidy argue that the current benefit is not
14,228 employees (of which more than 12,000 were FTEs)
efficient or equitably distributed among eligible patrons and
serving 5.4 million authorized households.
that running a chain of grocery stores is not a core function
Table 2.DeCA Appropriations FY2015-FY2020
of DOD. Some military personnel are assigned to locations
without convenient access to a commissary. In particular,
Fiscal Year
Amount in Billions
military retirees and reservists may be less likely to live in
close proximity to an installation with commissary services.
FY2015
$1.3
Further, with the expansion of discount grocery stores and
FY2016
$1.3
grocery delivery services, the commissary benefit may not
FY2017
$1.4
be as attractive as it once was. One alternate proposal is for
FY2018
$1.4
DOD use the savings generated from a reduction in the
subsidy towards an annual “grocery allowance” for active
FY2019
$1.3
duty military families that could be better targeted to
FY2020
$1.0
specific pay grades with higher need (i.e., junior enlisted).
Source: Overview - FY2021 Defense Budget, Figure 2.2. Military
Proponents for consolidation contend that merging all
Family Support Programs, on p. 2-7 at
systems into a single Defense Resale Activity could save
https://comptrol er.defense.gov/Portals/45/Documents/defbudget/fy20
money by streamlining functions such as accounting,
21/fy2021_Budget_Request_Overview_Book.pdf; and earlier budget
administration and support; allowing for greater flexibility
requests at https://comptrol er.defense.gov/Budget-Materials/.
of products sold; and aligning incentives for commissaries
and exchanges.
Exchanges: Non-Appropriated Funds
Section 627 of the FY2019 NDAA required DOD to study
Unlike commissaries, exchanges sell merchandise for profit
the feasibility of consolidating commissaries and exchanges
similar to retail or department stores. In FY2019, AAFES
into a single defense resale system. The study, Department
reported that it generated over $8.6 billion in annual
of Defense Report on the Development of a Single Defense
revenue and $369 million in dividend-eligible earnings.
Resale System, dated April 29, 2019, concluded that the
These dividends are paid into the Services’ Central Welfare
benefits of consolidating the two systems outweigh the
Funds, which cover operating expenses, maintain facilities,
costs. The study projected net savings of $700 million to
and, fund MWR programs and services such as leisure
$1.3 billion of combined appropriated and non-appropriated
travel, fitness centers, Child Development Centers, youth
funds over the first five years, with $400 to $700 million in
programs, outdoor recreation, and movie theaters.
recurring annual net savings afterward.
Commissary and Exchange Reform
Relevant Statute
Proposals
Title 10, U.S. Code Chapter 54
Over the past few years, Congress has been concerned with
Title 10, U.S. Code, Chapter 147
improving DeCA. Recent reform efforts by Congress
generally have sought to explore ways to reduce DeCA’s
CRS Products
reliance on appropriated funds without reducing patrons’
CRS Report R46107, FY2020 National Defense Authorization
commissary benefits and/or revenues generated by military
Act: Selected Military Personnel Issues (and prior-year reports),
exchanges. Some of the past proposals from military
section on “Defense Commissary System.”
commissions, think tanks, or legislative agencies have
CRS In Focus IF11233, Defense Primer: Defense Working Capital
included one or more of the following:
Funds, see section “Select Defense-Wide DWCFs.”
 reducing or cancelling the commissary subsidy;
 consolidating the commissary and three exchange
Other Resources
systems into one entity, to be called the Defense Resale
Activity (DeRA);
DODI 1330.17, DOD Commissary Program
 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
Barbara Salazar Torreon, Senior Research Librarian
opposed any reduction to the commissary subsidy and
Kristy N. Kamarck, Analyst in Military Manpower
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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https://crsreports.congress.gov | IF11089 · VERSION 7 · UPDATED

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