Benefits basics: Commissaries and exchanges (2024)

Editor’s note: This is one in a series of pieces that make up the Military Times 2018 Benefits Guide. Read or download the entire e-book here.

Commissaries and exchanges have undergone some major changes in the last year, with more proposals on the horizon that would affect the benefits ... including a proposal by Defense Department officials to consolidate the programs.

What you need to know about both:

What they are: Commissaries are on-base stores that sell discounted groceries to authorized customers. Exchanges are on-base stores (with an online component) that sell a variety of items ranging from clothing and shoes to toys, furniture, home appliances and electronics. They have on-base gas stations and stores that sell alcoholic beverages.

Eligibility: As of Veterans Day 2017, all honorably discharged veterans can shop at online exchanges. This has opened up the exchange online shopping benefit to about 13 million additional veterans who didn’t previously have any military shopping benefits. Otherwise, veterans who don’t retire from the military generally don’t have exchange or commissary privileges.

This veterans benefit doesn’t apply to brick-and-mortar stores. By the end of 2017, more than 56,000 veterans had shopped at Shopmyexchange.com using the tax-free benefit.

In general, anyone with a valid military ID card can shop in commissary and exchange stores and online. Also eligible are 100 percent disabled veterans, surviving spouses, and former spouses with dependent children.

The details: For decades, commissary items were sold at cost from the manufacturer or distributor, plus a 5 percent surcharge used to build and renovate stores. That changed in 2017, when officials began using new authority to raise and lower prices — responding, they said, to outside-the-gate competition.

Lawmakers require that any price changes can’t change the overall level of customer savings, but those savings will vary depending on what’s purchased. DoD has put increasing pressure on commissary officials to reduce the amount of taxpayer dollars — about $1.3 billion a year — to operate the stores.

On the shelves: Along with price changes, customers have seen expanded private-label, or store-brand, offerings. Among the first were bottled water and plastic bags; they’ve expanded to include cheese, rice and dry beans, foam and plastic plates, shelf stable juices, water enhancers and powered soft drinks, paper towels and bath tissue.

While customers are paying less for some products, the commissaries no longer carry some popular national brands.

At checkout: In late 2017, commissaries began to accept the Military Star card, which is a credit card program run by the Army and Air Force Exchange Service. Commissaries continue to accept other forms of payment, including other major credit cards, but those card issuers charge the government transaction fees; the Military Star card doesn’t.

Anyone who doesn’t pay the Star Card balance in full each month will pay interest; that money goes back to support the exchanges and morale, welfare and recreation programs.

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WHAT’S NEW

More private-label products have either hit commissary shelves recently or will arrive soon, including baking goods, ketchup, mustard, peanut butter, mayonnaise, broth, cooking sprays, canned beans, and other items. Officials plan to increase the inventory of such products gradually to about 3,000 to 4,000 items.

Behind the scenes, Defense Department officials have been working on a plan to consolidate the commissaries and exchanges into a single “defense resale enterprise.” It’s a draft proposal; the law will have to be changed, and it’s unclear how lawmakers will react.

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