Sunday, October 26, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Let 22M vets shop online, says Exchange chief

By
From page B11 | June 08, 2014 |

Defense officials are weighing a proposal from the director of the Army and Air Force Exchange Service to allow the nation’s 22 million honorably discharged veterans, and perhaps an equal number of their family members to shop online for military exchange products and discounts.

Shoppers who use the AAFES website enjoy savings of up to 25 percent on many brand-name products. They also avoid state and local sale taxes on their purchases just like on-base shoppers do.

By providing online discounts to millions of deserving veterans and families, said Thomas C. Shull, chief executive officer of AAFES, the exchange services would see overall profits soar while protecting the benefit in tough budget times and ensuring that quality-of-life programs for military families continue to be funded by exchange profits or “dividends.”

Shull pitched his idea in a May 8 memorandum to the undersecretary of defense for personnel and readiness, with review and comment also sought from top manpower officials in the Army, Navy and Air Force. A spokeswoman for Acting Undersecretary Jessica L. Garfola Wright said the proposal “is undergoing staffing and no decisions have been made.”

Allowing veterans access to online exchange shopping, Shull assured officials in his memo, “will not adversely affect the benefit to currently serving and retiree personnel in any way.” Indeed, he added, it will enhance the benefit by increasing profits and, therefore, increase dividends to support the services’ Morale, Welfare and Recreation “funding accounts.”

Preserving the shopping benefit “is in the best interest of the entire military community,” Shull said. Then he summarized why it’s in jeopardy, citing “announced and planned troop drawdowns, large cuts to the DOD budget for Morale, Welfare and Recreation activities and fewer personnel and families living on the installation, all of which are leading to a greatly reduced customer base and decreased earnings/dividends.”

In a phone interview Tuesday from AAFES headquarters in Dallas, Shull, a West Point graduate and retired reserve major, said his online proposal is a “win-win-win” idea. It would help veterans, help exchanges and help to protect force “readiness and resiliency” by ensuring that exchange profits can sustain on-base quality of life programs.

AAFES is the largest of three exchange services. Defense officials might reject Shull’s plan unless all three support it. Marine Corps Exchange officials are said to be in favor, though this could not be confirmed by deadline by phone call or emails to a Marine Corps Exchange spokesman.

Kathleen Martin, spokeswoman for the Navy Exchange Service Command, said with the proposal under review “it would be premature for us to comment . . . at this time. We will certainly evaluate and respond to any proposals or initiatives presented to us by the (Department of Navy or Department of Defense) leadership.”

Navy officials, a source said, have raised concerns about the added cost of verifying veterans’ status for millions of potential shoppers, and whether allowing online shopping would lead, over time, to pressure that millions of veterans deserve full access to on-base stores.

A total of 12 million active duty and reserve component members, retirees, dependents and survivors are now eligible to shop at military exchanges. Shull envisions that pool expanded for online shopping to 44 million including honorably discharged veterans and dependents. He projects online sales would climb from $200 million a year to $1 billion.

Unlimited exchange privileges are available now only to veterans who are military retirees or 100-percent disabled or hospitalized on base. To expand shopper eligibility requires only a change in defense policy, not law.

Whether Shull’s plan is approved or not, AAFES will broaden its selection of goods sold online by year’s end from 20 percent of items now stocked in larger exchange stores to 50 percent. AAFES also is conducting a major overhaul of its online shopping experience by partnering with outside retail experts to speed ordering and shipping and to expand call centers. Online shoppers will see vast improvements by Labor Day, Shull said.

He first thought of giving more veterans access to online shopping a year ago, Shull said, in considering the extraordinary pace of operations from recent wars with many members deploying four or five times to Iraq and Afghanistan. This left service members at greater risk, but also their families, given high divorce rates and other consequences, Shull said.

The notion that vets from any era would deserve and appreciate online discount shopping dovetailed nicely with other AAFES goals: to preserve the benefit amid tighter budgets and a force drawdown and to sustain profits to fund MWR programs.

Last March, Shull had authored another controversial memo, this one in reaction to administration plans to slash funding for commissaries, from $1.4 billion annually down to $400 million, by fiscal year 2017 and to allow grocery discounts to fall from 30 percent, on average, down to 10. Shull warned that an exodus of patrons would “render the commissary system unsustainable,” forcing many stores to close with “devastating” consequences to exchanges.

To better handle such cuts and preserve discount shopping, Shull proposed merging commissary operations with exchanges, and relying on resulting efficiencies to stabilize grocery prices and ultimately keep patrons.

The administration’s plan to cut commissary support has gained no traction in Congress this year. Shull remains concerned that commissary discounts will erode over time, which would leave exchanges vulnerable too.

To date, online shopping has been a break-even feature for AAFES, having no impact on profits. But if honorably discharged veterans are allowed to shop online, Shull predicts a tenfold increase in online sales and profits of $160 million annually, a pop of 50 percent in total AAFES profits.

Representatives of major military associations who serve on the Exchange Retiree Advisory Council unanimously support the plan. Shull said he hopes to have a decision from the Defense officials within a few months. It would take of year of preparation to execute the plan. Shull would like to have online shopping open to millions more veterans by Veterans Day 2015.

Send comments to Military Update, P.O. Box 231111, Centreville, VA, 20120, email milupdate@aol.com or tweet @Military_Update.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Back from the ashes: One man is home for Halloween

By Amy Maginnis-Honey | From Page: A1 | Gallery

 
Free flu shots given at church

By Susan Hiland | From Page: A4 | Gallery

Gala boosts The Leaven’s efforts in Solano

By Glen Faison | From Page: A5

 
Military graduates have county ties

By Nick DeCicco | From Page: B10

Slim chance to stop coming higher RX co-pays

By Tom Philpott | From Page: B10

 
.

US / World

.

Opinion

Question of the week: Do think Fairfield has a crime problem?

By Daily Republic | From Page: A8 | Gallery

 
Sound off for Oct. 26, 2014

By Daily Republic | From Page: A8

Tourists get more than expected

By Letter to the Editor | From Page: A8

 
Leisure Town’s leaders support professional management

By Letter to the Editor | From Page: A8

 
.

Living

80-year-old nun still teaching

By The Associated Press | From Page: C3

 
Mormons address mystery surrounding undergarments

By The Associated Press | From Page: C3, 1 Comment

.

Entertainment

Jimmy Fallon’s picture book inspired by daughter

By The Associated Press | From Page: C6

 
PUBLISHERS WEEKLY

By The Associated Press | From Page: C6

Harris’ atypical life is now atypical book

By The Associated Press | From Page: C6

 
Lena Dunham bares more in new memoir

By The Associated Press | From Page: C6

.

Sports

Raiders try to erase only zero left in win column

By The Associated Press | From Page: B1

 
Sweet dreams: Sleep expert helps Giants in October

By The Associated Press | From Page: B1

Giants surge past Royals 11-4 to tie World Series at 2

By The Associated Press | From Page: B1

 
Stanford routs Oregon St. 38-14, faces Oregon next

By The Associated Press | From Page: B1 | Gallery

Stow shouts ‘Play ball!’ before Game 4 of Series

By The Associated Press | From Page: B2

 
Splash shots still define Giants’ ballpark

By The Associated Press | From Page: B2 | Gallery

Bumgarner to face Shields in Game 5 of Series

By The Associated Press | From Page: B2

 
Mo’ne Davis throws out 1st pitch at World Series

By The Associated Press | From Page: B2

Marlins’ Stanton expects to have normal offseason

By The Associated Press | From Page: B4

 
Raiders activate cornerback Hayden, DE Autry

By The Associated Press | From Page: B4

Kings’ Gay, McLemore cleared to play in opener

By The Associated Press | From Page: B4

 
Hodgson helps Sabres beat Sharks 2-1

By The Associated Press | From Page: B4 | Gallery

MacKenzie, Svoboda tied for PGA lead at Sea Island

By The Associated Press | From Page: B4

 
.

Business

Of mutual interest: What’s next for funds when Fed stops buying bonds?

By The Associated Press | From Page: B7 | Gallery

 
Apple Pay Q&A: What you need to know

By The Associated Press | From Page: B7

Crowdfunding gives a leg up to animal projects

By The Associated Press | From Page: B8

 
Google exec sets records with leap from near-space

By The Associated Press | From Page: B8

Review: Macs, mobile unite with Yosemite system

By The Associated Press | From Page: B12 | Gallery

 
Smart Spending: A spin with Wal-Mart’s savings app

By The Associated Press | From Page: B12

40 years later, ‘Power Broker’ is standard reading

By The Associated Press | From Page: B12

 
.

Obituaries

Eugene Sylvester Carter Sr.

By Susan Hiland | From Page: A4

 
Guillermo Lara Lopez

By Susan Hiland | From Page: A4

Melvin Tate

By Nancy Green | From Page: A4

 
Dr. Robert M. Takamoto

By Nancy Green | From Page: A4

.

Comics