Defense Primer: Military Commissaries and Exchanges
Updated June 30, 2021
Defense Primer: Military Commissaries and Exchanges
The Department of Defense (DOD) offers certain quality-
fee for each order, until further notice. This fee is usual y waived the
of-life benefits to military members, their families, and
first 30 days after the Click2Go service is initiated at a store.
retirees. The general purpose of these benefits is to attract,
According to Bil Moore, DeCA’s director and CEO, “this wil al ow
retain, and support morale and readiness for military
DeCA to have a strong e-commerce presence in keeping with its
servicemembers. One of these benefits is worldwide access
strategic goals to make the commissary benefit accessible to as many
to grocery and retail stores—called commissaries and
patrons as possible.”
exchanges—typically located on military installations.
Military Exchanges
Commissaries provide subsidized groceries and household
DOD maintains an exchange system that includes the Army
goods to eligible patrons. Exchanges sell goods for profit,
and Air Force Exchange System (AAFES), the Navy
similar to a department or specialty store, but use some of
Exchange (NEX), and the Marine Corps Exchange (MCX).
this profit to fund various Morale, Welfare, and Recreation
Each service has its own board of directors to align
(MWR) activities (See Table 1).
operations and services. These exchanges provide military
Organization and Management
installations with goods and services similar to department
Defense Commissaries
stores and are often located near commissaries. Some
The modern commissary system began in 1867. Each of the
exchanges also operate gas stations, mini-marts, food
services operated its own commissaries and exchanges until
courts, barber and beauty shops, and liquor stores, some of
1991, when the commissary system was consolidated under
which are operated by outside or contract vendors.
the Defense Commissary Agency (DeCA). According to the
According to AAFES, “20% to 30% of its foot traffic,
DeCA Annual Report for FY2020, as of September 30,
representing $1 billion in sales, is attributable to customers’
2020, DeCA operated 236 stores on military installations
proximity to commissaries.” DOD regulates what items
worldwide, including in 13 countries and 2 U.S. territories;
may be sold at commissaries and exchanges to comply with
and employ a workforce of over 12,000 civilian full-time
statutory requirements (10 U.S.C. §2483) and to avoid
equivalents (FTEs). As a defense agency, DeCA reports to
direct competition with one another.
the Office of the Secretary of Defense and has a board of
Authorized Patrons
directors composed of members from each of the military
Authorized patrons of military commissaries and exchanges
services. DeCA provides subsidized groceries and
include active duty, National Guard and Reserve members,
household goods at cost plus a 5% surcharge that is used to
military retirees, Medal of Honor recipients, 100% disabled
fund new commissary construction and store-level
veterans, and certain family members or dependents. Since
refurbishment, maintenance, and equipment.
November 11, 2017, DOD has allowed limited online
exchange shopping privileges to all honorably discharged
Table 1. Breakdown of Commissaries vs. Exchanges
veterans. Veterans may verify eligibility at
Commissaries Exchanges
https://www.shopmyexchange.com/veterans.
On January 1, 2020, more than 4 million service-connected
Funding
Appropriated
Sales of goods, non-
disabled veterans, Purple Heart recipients, former prisoners
Funds (APF)
appropriated (NAF)
of war, and their primary caregivers were granted eligibility
Management DeCA Board of
Board of Directors for
to full commissary access and certain MWR activities in
Directors
each military service
Section 621 of the John S. McCain National Defense
exchange system
Authorization Act (NDAA) for FY2019 (P.L. 115-232).
Products
Grocery and
Clothing, shoes, uniforms,
Section 641 of the FY2020 NDAA (P.L. 116-92), extended
household
furniture, computers,
certain MWR privileges to Foreign Service officers of the
goods
alcohol, cigarettes, jewelry
Department of State on mandatory home leave.
The FY2021 William M. (Mac) Thornberry NDAA (P.L.
Online Sales
Limited*
Yes (excludes cigarettes,
116-283) enacted on January 1, 2021, included provisions
and Delivery
alcohol, and military
(Sections 631 and 632) that authorized base first responders
uniforms)
the use of commissary stores and MWR facilities, and
Sources: “About DeCA” at https://www.commissaries.com/our-
external first responders’ access to mobile commissary or
agency/about-deca; and “Exchange Quick Facts,” at
exchange stores when deployed to an area covered by a
https://www.aafes.com/about-exchange/exchange-quick-facts/.
declaration of a major disaster or emergency.
Notes: *In 2013, DeCA started a trial program offering online
On April 29, 2021, DOD announced expanded access
ordering with curbside pickup, known as Click2Go. The trial ended
effective May 1, 2021, to DOD and Coast Guard civilian
on June 1, 2019. By the end of July 2021, approximately 87 stores
employees and civilian retirees to shop at military
(which is nearly half of al 178 stateside stores) wil have the online
exchanges in the United States, U.S. territories and
ordering/curbside pickup service. DeCA is waiving the $4.95 service
possessions. Online access is to be available to these
https://crsreports.congress.gov
Defense Primer: Military Commissaries and Exchanges
patrons in mid-October 2021.Civilian dependents are not
Military, retiree, and veteran service organizations have
included in this expanded access.
generally opposed any reduction to the commissary subsidy
Funding
and advocate for maintaining the current system. They are
concerned that changes could dilute the perceived or actual
Commissaries: Appropriated Funds
benefit for eligible patrons (particularly military retirees
DeCA is an appropriated fund activity (APF). Congress
who may be on a fixed income), harm recruitment and
funds commissary operations with an annual appropriation
retention, and reduce the revenues generated for MWR
to the DeCA Working Capital Fund (WCF). According to
activities. Advocates for the commissary and exchange
DeCA’s FY2020 Annual Financial Report, its operation
systems also note that the systems provide job opportunities
costs were $1.0 billion. By law (10 U.S.C §2483),
for military spouses and other dependents.
appropriated funds may be used to cover employee salaries
and wages, utilities, communications, operating supplies
Those who have proposed a reduction or cancellation of the
and services, food shipments to overseas destinations, and
commissary subsidy argue that the current benefit is not
other management, equipment, and/or information
efficient or equitably distributed among eligible patrons and
technology costs. In FY2020, DeCA employed a total of
that running a chain of grocery stores is not a core function
14,228 employees (of which more than 12,000 were FTEs)
of DOD. Some military personnel are assigned to locations
serving 5.4 million authorized households.
without convenient access to a commissary. In particular,
military retirees and reservists may be less likely to live in
Table 2. DeCA Appropriations FY2018-FY2022
close proximity to an installation with commissary services.
Further, with the expansion of discount grocery stores and
Fiscal Year
Amount in Billions
grocery delivery services, the commissary benefit may not
FY2018
$1.4
be as attractive as it once was. One alternate proposal is for
DOD use the savings generated from a reduction in the
FY2019
$1.3
subsidy towards an annual “grocery allowance” for active
FY2020
$1.0
duty military families that could be better targeted to
FY2021
$1.1
specific pay grades with higher need (i.e., junior enlisted).
FY2022
$1.2 (requested)
Proponents for consolidation contend that merging all
systems into a single Defense Resale Activity could save
Source: Overview - FY2022 Defense Budget, Figure 5.3. Military
money by streamlining functions such as accounting,
Family Support Programs, on p. 5-8 (PDF p. 63 of 148 pages) at
administration and support; allowing for greater flexibility
https://comptrol er.defense.gov/Portals/45/Documents/defbudget/FY2
of products sold; and aligning incentives for commissaries
022/FY2022_Budget_Request_Overview_Book.pdf; and earlier
and exchanges.
budget requests at https://comptrol er.defense.gov/Budget-Materials/.
Section 629A of the FY2021 NDAA required a report by
Exchanges: Non-Appropriated Funds
the Secretary of Defense on the extension of commissary
Unlike commissaries, exchanges sell merchandise for profit
and exchange benefits for surviving remarried spouses with
similar to retail or department stores. In FY2020, AAFES
dependent children of servicemembers who die while on
reported that it generated over $7.5 billion in annual
active duty or certain reserve duty. See section “Defense
revenue and $218 million in dividend-eligible earnings.
Exchange and Commissary Stores,” in CRS Report
These dividends are paid into the Services’ Central Welfare
R46810, FY2021 National Defense Authorization Act:
Funds, which cover operating expenses, maintain facilities,
Selected Personnel and Health Care Issues.
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
CRS Products
Over the past few years, Congress has been concerned with
improving DeCA. Recent reform efforts by Congress
CRS Report R46107, FY2020 National Defense Authorization
generally have sought to explore ways to reduce DeCA’s
Act: Selected Military Personnel Issues (and prior-year reports),
reliance on appropriated funds without reducing patrons’
section on “Defense Commissary System.”
commissary benefits and/or revenues generated by military
CRS In Focus IF11233, Defense Primer: Defense Working Capital
exchanges. Some of the past proposals from military
Funds, see section “Select Defense-Wide DWCFs.”
commissions, think tanks, or legislative agencies have
included one or more of the following:
Other Resources DODI 1330.17, DOD Commissary Program
reducing or cancelling the commissary subsidy;
DODI 1330.21, Armed Services Exchange Regulation
consolidating the commissary and three exchange
DODI 1015.10, Authorized Patronage of Military MWR Programs
systems into one entity, to be called the Defense Resale
Activity (DeRA);
expanding commissary and exchange eligibility to
additional veteran groups; and/or
charging user fees for certain categories of patrons (e.g.,
Barbara Salazar Torreon, Acting Head Research and
DOD civilian employees).
Library Services
Kristy N. Kamarck, Specialist in Military Manpower
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Defense Primer: Military Commissaries and Exchanges
IF11089
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