Army and Air Force Exchange Service

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Army & Air Force Exchange Service
Type Department store, Government agency
Industry Retail
Founded 1895
Headquarters Dallas, Texas, United States
Products base exchanges
department stores
franchises
Employees 44,700
Parent United States Department of Defense
Website www.shopmyexchange.com

The Army & Air Force Exchange Service (Exchange) is an agency of the United States Department of Defense. Its dual missions are to provide quality merchandise and services of necessity and convenience to authorized customers at uniform low prices, and to generate reasonable earnings to supplement appropriated funds for the support of United States Army and Air Force Morale, Welfare and Recreation (MWR) programs. The Exchange is headquartered in Dallas, Texas, and its Director/Chief Executive Officer is Tom Shull. The Navy operates the equivalent Navy Exchange (NEX), while the Marine Corps operates the Marine Corps Exchange (MCX) and the United States Coast Guard operates the Coast Guard Exchange (CGX).

Mission[edit]

The Exchange is charged with generating reasonable earnings, but returns roughly two-thirds of its net earnings to its customer base through their respective MWR programs ([1]). The only congressionally appropriated money spent in the Exchange comes in the form of utilities and transportation of merchandise to overseas exchanges and for salaries of U.S. military personnel assigned to the Exchange. A non-appropriated fund instrumentality (NAFI) of the Department of Defense, the Exchange funds 98% of its operating budget, including civilian employee salaries, inventory investments, utilities and capital investments for equipment, vehicles and facilities, from the sale of merchandise, food and services to customers.

Roughly 70% of the Exchange earnings are paid to MWR programs.[1] In the last ten years, more than $2.24 billion has been contributed by the Exchange to the Army and Air Force to spend on quality of life improvements for Soldiers, Airmen and their families—Youth Services, Armed Forces Recreation Centers, arts and crafts, aquatic centers, post functions and golf courses.

In Fiscal Year 2011, the Exchange earned more than $277 million from direct sales (retail, food, and vending/services), finance revenue, and concessions on revenues of $10.3 billion.[2] MWR and services programs received $203.3 million, which was distributed as follows:

  • U.S. Army, $121.3 million
  • U.S. Air Force, $68.8 million
  • U.S. Marine Corps, $12.1 million
  • U.S. Navy, $1.1 million

The per capita dividend in 2011 was $212 for every Soldier and Airman.

In addition to funding MWR programs, the Exchange earnings are used to build new stores or renovate existing facilities without expense to the federal government. Funds to construct these new or replacement facilities come entirely from sales of merchandise and services.

In 2009, the new exchange built at Ramstein Air Base in Kaiserslautern, Germany, became the largest exchange facility in the world.

On its website, the Exchange states its business aim is "to serve Soldiers, Airmen and their families around the world".

Brands[edit]

Franchised Brands[edit]

The Exchange Proprietary Brands[edit]

  • American Eatery
  • Anthony's Pizza
  • The Chicken Loft
  • Decoded
  • Exchange Select
  • Exchange Cafe
  • Frank's Franks
  • KC Cattle
  • La Casa de Amigos
  • Main St. X-Presso
  • Patriot's Choice
  • Reel Time Express (Concessions at Exchange theaters)
  • Resilian Communications
  • Robin Hood Sandwich Shoppe
  • Royal Chopstix
  • Sabre
  • Street Level Nine SL-9
  • Sweet Reflections
  • JW - ladies updated
  • Passports - ladies casual
  • Luciano Dante - ladies career
  • Driftaway -ladies sleep
  • New Recruits Maternity
  • R&R Casuals - mens
  • Junction West - mens
  • Ponytails - girls
  • Buzzcuts - boys

Under contract with AAFES[edit]

Gamestop

Controversy[edit]

Censorship[edit]

On May 9, 2001, The Stars and Stripes reported that the Exchange would not stock American Terrorist: Timothy McVeigh & The Oklahoma City Bombing on its shelves, nor would they allow it to be special ordered by customers at their stores. Although the Exchange has refused to sell other published materials, most of them were covered by the Honor and Decency Act, a Department of Defense policy banning certain pornographic materials.[4]

In September, 2010, various branches of the military, including the Exchange, banned the sale of the new Medal of Honor game on base (both in the Exchange Main Store and in GameStop locations on base). The reason behind the ban was that in the multiplayer of the game a player could control the Taliban against American forces. Due to overwhelming pressure from different sources and the threat of other bans (including the UK Defense who was threatening to ban the game throughout all of England), EA(the game's publisher) removed the term Taliban from the game (replacing it with "Opposing Forces" which is what all other military style shooters call the enemy). To this day, however, it is not possible to find this game on any Exchange base, either in the main store or the GameStop locations.[5]

Pricing discrepancies[edit]

Although the Exchange facilities do not charge taxes on products (which includes excise taxes), the prices for alcohol and tobacco products are only marginally cheaper than retail stores that charge taxes. The lowest price for which tobacco and alcohol can be sold is limited by DoD directive. For tobacco products sold in CONUS, the price floor is 5% less than the most competitive local price in the local community; for OCONUS, tobacco prices fall within the range of the CONUS market. Alcohol sold in CONUS will be sold not less than 10% below the best price in Alcohol Beverage Control states, and not less than 5% below the competitive rate at non Alcohol Beverage Control states. According to the Exchange, these limits are set by the Department of Defense, per DoD Instruction 1330.9. According to the DoD, the purpose of this is to comply with the deglamorization of alcohol and tobacco policy. However, other goods in their post exchange stores are considerably overpriced, even by convenience store standards. For example: a package of Chips Ahoy that may cost $3.50 in Walmart costs $4.99 in a PX. Many prices are inflated unreasonably for things such as DVD's, health and beauty aids, and softlines.[6]

Gas sales[edit]

The Hayden Cartwright Act does require the Exchange to pay these taxes. Fuel sold to military personnel on military installations is often sold at nearly the same rate as that found at nearby civilian locations, with it becoming increasingly common to find stations in surrounding communities selling fuel for several cents less per gallon. According to the Exchange, gasoline prices are only marginally cheaper because the individual stores are required to be "competitive" with off-post locales.[7] In most locations, the exchanges are required to set prices to the exact rate of the lowest civilian rate within a certain number of miles of the installation's boundary, generally within five miles. Prices will be surveyed at each rate and the lowest price for each rate will be the price set at all fueling stations within that installation, or within that region of the installation in the case of larger installations where identical prices may not be practical. Prices may be surveyed at a rate determined appropriate for the local installation, up to multiple times per day, but not less frequently than weekly. Prices may amount to a loss for the exchange; the Exchange is the only military exchange service permitted to lose money on fuel sales.

See also[edit]

References[edit]

  1. ^ The Exchange Fact Sheet (– Scholar search), January 2007, archived from the original on 2007-04-22, retrieved 2007-03-07 [dead link]
  2. ^ http://www.af.mil/information/factsheets/factsheet.asp?fsID=162
  3. ^ "Search". The Globe and Mail. 
  4. ^ Pilgrim, Eric B.; Boydston, Keith (May 9, 2001), Stars & Stripes, retrieved 2007-03-06 
  5. ^ Sharkey, Mike (September 3, 2010), AAFES Commander Issues Statement on Medal of Honor Ban, retrieved 2013-09-27 
  6. ^ A1C Moore, Kimberly (January 11, 2007), Tobacco Costs Soar, retrieved 2007-03-07 
  7. ^ "the Exchange CONUS Gas Pricing – Fact Not Fiction". 2005-12-15. Retrieved 2007-04-01. 

External links[edit]