Pentagon to Open Online Exchange Shopping to Vets in 2017

A Defense Department retail board has given the green light to a plan to open online exchange shopping to all honorably discharged veterans, with hopes of starting the program on Veterans Day in 2017.

The move, originally proposed by the Army and Air Force Exchange Service in 2014, was approved by the Executive Resale Board early this month. The board unanimously voted to ask the Pentagon to update its policy regarding patronage rules.

Pentagon officials confirmed that the proposal is still under consideration.

The board's decision was announced in an Aug. 12 email newsletter from the American Logistics Association, which lobbies on behalf of companies that do business with the exchange and commissary systems.

Opening the Exchange to the about 20 million honorably discharged U.S. veterans comes with a strong business case, Exchange officials have said.

The move could produce between $226 million to $1.13 billion in annual sales, according to the 2014 proposal. It could bring as much as $108 million annually in support for MWR programs, which rely on exchange dividends for the bulk of their funding across the services, it says.

However, opening commissary shopping to honorably discharged veterans isn't included in the proposal.

Unlike the exchanges, the Defense Commissary Agency relies on a $1.4 billion annual taxpayer subsidy to operate. Because goods there are sold at cost plus a 5 percent surcharge, increasing the customer base to all veterans would result in higher taxpayer costs under the current operating system.