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What the Recruiter Never Told You

Part 13 -- Military Commissaries and Exchanges

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Continued from Part 12

I run into civilians all the time who think, as a military retiree, I can buy a suit at the Base Exchange for $20.00, or can buy a carton of cigarettes at the Commissary for $2.00 per carton.

While the Commissary and Base Exchange can save you money, they certainly do not produce the gigantic savings that many civilians think they do. You can't buy a $2,000 stereo for $500. You won't find T-Bone Steak for $.49 per pound.

Commissaries

Defense Commissary Agency (DeCA) Commissaries are appropriated fund activities. By that, I mean they are allowed to use taxpayer dollars (if approved by Congress) for their operation and construction. The agency operates more than 261 stores throughout the world. Commissaries operate under guidelines and procedures incorporated into Federal Law. Commissaries must sell their items for the same price they purchase them. A five percent surcharge is added to the purchase to help pay for normal operating costs and facility maintenance and construction.

Although most of the commissary "pay-roll" (cashiers, stockers, etc.) comes out of the surcharge, baggers are independent contractors who work solely for tips. It's customary to tip baggers between $1.00 and $5.00, depending upon the total amount of your purchase.

DeCA claims to provide an overall savings of over 30 percent. That means a family of four, shopping regularly can save about $3,000 per year and a single member can save about $1,000 per year in grocery costs.

However, your particular mileage may vary, depending upon whether or not your local civilian food store charges a sales tax for food items, and what type of grocery stores you have available in your local area. In preparation for this article, I visited a local Wal Mart "Super Store," and bought $103.57 worth of groceries. I then made a list of the items I bought and traveled to Patrick AFB (about 90 miles away). At the commissary there, I priced the exact same items. According to DeCA, my commissary bill should have been around $70.00. Had I actually purchased the items, my bill would have been $85.52. Tack on the 5 percent surcharge, and it would have been $89.79. I won't count the bagger's tip, as Commissary baggers not only bag your groceries but take them outside and load them into your car. That's worth every penny of the tip, in my opinion. My total discount would have been 13.3 percent.

While DeCA is required by law to resell items at cost (plus surcharge), it is allowed to "cheat." A few years ago, without the permission of Congress, the Commander of DeCA unilaterally decided to increase the price of cigarettes sold in the commissaries. To get around the law, DeCa now buys all of it's tobacco products from military exchanges, which sells tobacco items at prices comparable to the local civilian economy prices. Many of you may not smoke, so may not care, and some of you may be saying, "Good. They should raise the price of cigarettes to discourage smoking." However, in my opinion, this has established a dangerous precedent. If DeCA is allowed to artificially inflate prices by choosing the source it purchases from (instead of purchasing from the lowest-priced source), then there is nothing to stop them from deciding next year that sugar or red meat is bad, and take similar measures with those type of items.

Military Exchanges

Unlike commissaries, military exchanges do mark-up items. In fact, in Fiscal Year 2006, AAFES had $8.9 billion in sales, and made $427 million in "profit." $231.6 million of this "profit" was used for local and service-wide Moral, Welfare, and Recreation (MWR) projects (the rest was used by AAFES for other needs, such as facility renovation).

There are three separate exchange systems: The Army and Air Force Exchange Service (AAFES), The Navy Exchange Service (NEXCOM), and the Marine Corps Exchange.

The only congressionally appropriated money spent in the three exchange systems comes in the form of utilities and transportation of merchandise to overseas exchanges and for military salaries. A non-appropriated fund activity (NAF) of the Department of Defense, the exchange services fund 98% of their operating budgets (civilian employee salaries, inventory investments, utilities and capital investments for equipment, vehicles and facilities) from the sale of merchandise, food and services to customers.

There has been some talk about combining the three separate systems into one Exchange Service, but -- so far -- that's all it's been. Just talk.

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