Army and Air Force Exchange Service

History

The first exchanges were established on July 25, 1895, when the War Department issued General Orders Number 46 directing post commanders to establish an exchange at every post. Before the formation of the Exchange Service, U.S. military forces purchased provisions from bands of peddlers known as sutlers who followed the army.

The Army Exchange Service was formally established in 1941, and became the Army & Air Force Exchange Service in 1948 following the formation of the Air Force.

Since its establishment, the Exchange has been involved in 14 major military operations (to include World War II, Korea, Vietnam, Grenada, Panama, the Balkans and Operations Enduring and Iraqi Freedom) as well as several dozen humanitarian and disaster relief contingencies.

Structure and funding

Part of the Department of Defense, the Exchange is directed by a Board of Directors responsible to the secretaries of the Army and Air Force through the Chiefs of Staff. As a non-appropriated fund activity, the Exchange self-funds 97 percent of its operations, with revenue coming from the sale of goods and services. The majority of the 3 percent in appropriated funds is used to fund overseas operations.

In 2012, Tom Shull became the Exchange’s first civilian Director/CEO, having previously served as an executive with Wise Foods, Inc., Hanover Direct, Inc., Barneys New York and Meridian Ventures. A West Point graduate, Shull served as an infantry company commander and held assignments at the White House and National Security Council.

In 2015, Shull’s emphasis on intensifying national brands, growing concessions and Express stores, strengthening the Exchange’s web presence and reducing costs led the Exchange to record operating earnings of $402 million, every dollar of which was reinvested into the military community.

Members of the Exchange's 13-member Board of Directors include Lt. Gen. Gina Grosso, Deputy of Chief of Staff for Manpower, Personnel and Services, Headquarters U.S. Air Force; Lt. Gen. Aundre Pigge, the Army's Deputy Chief of Staff, G-4; U.S. Army Sgt. Maj. Daniel A. Dailey and Air Force Chief Master Sgt. James A. Cody.

Earnings

One hundred percent of Exchange earnings are invested back into the military community. Two-thirds of Exchange earnings support Army, Air Force, Navy and Marine Corps morale, welfare and recreation programs, while the remaining third is used for new store construction and facility costs at no cost to the federal government.

In fiscal 2015, the Exchange had revenue of $8.5 billion and $402 million in earnings. Of those earnings, $237 million were paid to Army Morale, Welfare and Recreation (MWR), Air Force Services, and Navy and Marine Corps quality-of-life programs. In the past 10 years, the Exchange has distributed more than $2.4 billion for MWR to fund quality-of-life improvements.

Stores

The Exchange operates more than 2,500 facilities, including main stores, convenience stores, military clothing stores and theaters, across 50 U.S. states and 33 countries. Additionally, the Exchange has nearly 1,500 quick-serve restaurants such as Taco Bell, Burger King, Popeyes, Subway and Starbucks as well as over 3,300 concession operations. Authorized patrons of the Exchange include Active Duty, Reserves, National Guard, retired members of the U.S. uniformed services, recipients of the Medal of Honor, honorably discharged veterans certified 100% disabled by the United States Department of Veterans Affairs, or when hospitalized and their dependents by the presentation of the U.S. Uniformed Services Privilege and Identification Card.

Modern base and post exchanges (called BX in the Air Force, PX in the Army) provide tax-free goods - including name brands such as Michael Kors, Coach, and Ralph Lauren - to authorized shoppers. In addition, some Exchanges host concession malls with a variety of vendors and storefronts.

In November 2010, the Exchange unveiled Freedom Crossing at Fort Bliss, a $100 million outdoor mall anchored by a 217,000-square-foot Exchange Main Store and including a children's play area, outdoor dining patios, shaded landscaped areas, outdoor seating, an outdoor fireplace, an interactive fountain, a lawn for community events and concerts, and more than 40 storefronts and restaurants. The mall is the first of its kind on a United States armed services base.

Employees

The Exchange employs nearly 35,000 associates worldwide in the United States, Europe, the Pacific and the Middle East. Of these, about 27 percent are military spouses or dependents, 10 percent are veterans and 2 percent are active duty, reserves and the national guard. The Exchange has been named a Military Friendly Employer by Victory Media, publisher of G.I. Jobs and Military Spouse magazine, for five consecutive years, most recently receiving the publisher's Silver Award. In all, about 88 percent of the Exchange’s associates are connected in some way to the military.

Since Sept. 11, 2001, more than 4,400 Exchange associates have deployed to combat zones in Iraq and Afghanistan to support troops in combat operations. The Exchange currently operates 49 stores in contingency zones in countries such as Afghanistan, Kuwait, Iraq, Saudi Arabia, Jordan, Qatar, United Arab Emirates, Romania, Cyprus, Bosnia and Kosovo.

Military Star Card

The Exchange also operates and funds the Exchange Credit Program (ECP), a program established by Congress in 1979 to protect service members from predatory lending and offer responsible credit solutions to customers.

The Exchange Credit Program’s Military Star Card counts approximately 2 million cardholders from all branches of service, including qualified dependents, among its members. The Exchange Credit Program markets Military Star as the “one card solution” for all purchases made on military installations. Like the Exchange, the Exchange Credit Program contributes a significant portion of its earnings to morale, welfare and recreation programs, furnishing $639 million to MWR programs over the last 10 years.

According to a October 2016 report by CreditCards.com, the Military Star Card has the lowest flat interest rate among retail-branded credit cards.