Military Commissaries and Exchanges
What the Recruiter Never Told About Commissaries
I run into civilians all the time who think that 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.
Defense Commissary Agency (DeCA) Commissaries are appropriated fund activities—meaning that 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.
Payroll and Baggers
Although most of the commissary payroll (paying cashiers, stockers, etc.) comes out of the surcharge, baggers are self-employed individuals 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. Each bagger is engaged in the commercial solicitation of commissary customers. Upon solicitation of the customer, the bagger is voluntarily hired by the customer to bag and carry out the customer’s groceries in return for a tip and work for no one other than the customer who hires them.
How Much You Can Save at a DeCA
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 savings 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 Walmart Super Store and bought $103.57 worth of groceries. I then made a list of the items I bought and traveled to Patrick Air Force Base (about 90 miles away). At the commissary there, I priced the same items.
According to DeCA, my commissary bill should have been around $70.00. Had I 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.
DeCA "Cheats" with Cigarettes
While DeCA is required by law to resell items at cost (plus the 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 types of items.
Unlike commissaries, military exchanges do markup items, and a portion of profits go toward local and service-wide Moral, Welfare, and Recreation (MWR) projects; the rest is 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. As with the commissaries, there is no sales tax charged at the exchanges, and this can add up to significant savings over time, or when you are buying expensive items.
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 it has only been talk.
AAFES Price Matching
It is not difficult to find either an exact item or a like-item in civilian stores that is priced lower than the one you can purchase in a military exchange. AAFES combats this through a program called "We'll Match It." If an AAFES customer finds an identical item in the local community selling for a price lower than AAFES, the Exchange will match the price.
A common complaint about the exchanges comes from junior enlisted members and their families. While the exchanges may offer discounts on name-brand items, their selection of non-branded items leaves much to be desired. Many low-ranking enlisted folks can't afford Dooney & Bourke® handbags, no matter how high the savings. They would rather buy a no-brand name purse from Walmart at half the price.
On the other hand, I took a civilian friend with me shopping at the Keesler Air Force Base exchange a couple of years ago. I call this lady a "professional shopper" because she has a keen sense of what is in fashion and what is not, and what women's clothing and accessories should cost. She was thrilled with the selections and prices in the base exchange (BX). (That one shopping trip cost me several hundred dollars, however).
Base Service Stations, Liquor Stores, Food Franchises and Others
AAFES is also responsible for the operation of on-base service stations and Class VI (liquor) stores, as well as base theaters and food franchises (such as Burger King). Don't expect any super-savings in this area. To establish gas and liquor prices, AAFES periodically surveys the local area and attempts to set their prices just slightly below the off-base average. Because of this system, it's not difficult to find off-base service stations to buy gas cheaper, and finding beer and liquor at lower prices is no trouble at all.
Your Whopper hamburger will cost you the same price it does downtown.
AAFES is also a major source of employment for members of the Army and Air Force family. Approximately 25 percent of the 52,400 AAFES associates are military family members. Many associates have worked for years with AAFES as they've moved from one installation to another with their military sponsors. Another 3 percent of associates are military members who work part-time in exchanges during their off-duty hours.
The exchanges and commissaries provide important benefits and millions of dollars each year toward the service's MWR programs, but monetary savings from shopping at these facilities are modest, at best.
Other Parts in This Series
- What the Military Recruiter Never Told You
- Choosing a Military Service
- Meeting the Recruiter
- The Enlistment Process and Job Selection
- Enlistment Contracts and Enlistment Incentives
- Military Pay
- Housing, Housing Allowance, and Barracks
- Chow Halls and Food Allowance
- Education Programs
- Leave (Vacation) and Job Training
- Military Medical Care
- Morale, Welfare, and Recreation (MWR) Activities