Like many retailers, the Army and Air Force Exchange (AAFES) is looking for ways to improve their business model. But unlike many other retailers, better business for AAFES means better quality of life for military members, as some of the profits are distributed back to the military communities. Due to the changing environment and force reductions, Thomas C. Shull, the AAFES CEO, recently proposed allowing honorably-discharged military veterans to shop at their online store.
Currently, only active duty servicemembers, members of the Guard and Reserves, military retirees, and the families of these groups are eligible to shop at AAFES locations, either online or on base. Note that this proposal only includes allowing veterans to shop online, not at the physical stores located on bases. There is no current proposal to allow veterans to shop at on-base locations.
Impact of Allowing Veterans to Shop at AAFES Online Stores
AAFES officials estimate there are approximately 18.8 million veterans with an Honorable Discharge who would be allowed to shop at AAFES online stores under this proposal. Allowing these veterans to shop at AAFES online stores would give these veterans access to savings on a variety of products and could provide an additional $100 million for base Morale, Welfare, and Recreation (MWR) and quality of life programs. Increased sales could also allow AAFES to negotiate discounts on larger, bulk orders of goods.
This proposal is an important part of supporting the military community. AAFES distributes dividends to the MWR programs and other military activities. Over the last few years, AAFES sales have decreased substantially as military members and their families shop at other locations, and as the size of the military continues to decrease. The continued drawdown will have a dramatic impact on AAFES sales and how much money they can give back to the military community. AAFES officials estimate their sales could drop to one third of their current levels within the next few years. Extending the privilege of online shopping to qualified veterans would be a good way to thank veterans for their service, increase sales for AAFES, and increase distributions to base programs.
Roadblocks to Allowing Veterans to Shop at AAFES Online Stores
Right now this is just a proposal. AAFES first needs to obtain approval, then find a way to implement the program. Let’s start with approval: There are some officials who fear “benefits creep,” if veterans are allowed to shop at AAFES online stores. Basically, they fear this would be the start of veterans gaining access to other military support programs. Implementing this could also prove to be problematic. AAFES would need to find a fool-proof method of verifying veterans’ identity and discharge status before allowing them to shop at online stores. Doing so would possibly require a method of collecting and securing sensitive information, including veterans’ names, addresses, and Social Security numbers.
Will it Happen?
It’s too early to say right now. But overall, I see this as a positive development. The implementation could be tricky, but hopefully that would be a one-time up-front cost, followed by annual maintenance. But the increased revenues from additional sales should more than make up for the added administration expenses. Beyond the added admin costs, there isn’t much negative impact. Online stores scale easily, which means added sales, and potential costs savings on the part of AAFES. The proposal also doesn’t include access to shopping on base, so there is no negative impact to the active duty counterparts, such as buying up base inventory, more crowded stores, and increased reliance upon military resources (security, parking, traffic, etc.).
We should know more soon. The Executive Resale Board meets on Nov. 4, 2014. They hope to make a decision on this proposal shortly afterward. Implementation could take up to a year.
What are your thoughts—should honorably-discharged veterans be allowed to shop at AAFES online stores?