Veterans Online Exchange Benefit Being Tested, Nearer for Millions

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About the Author

Tom Philpott has covered the military for more than 30 years. His syndicated column, Military Update, reaches 2 million readers and focuses on breaking news affecting pay, benefits, and the lifestyle of service people. He is a contributing editor with Military Officer, and his freelance articles have appeared in numerous magazines including The New Yorker, Washingtonian, Readers' Digest, and Kiplinger's. Philpott served a tour in the U.S. Coast Guard as an information officer. 

 

The last time Forrest Cornelius, 51, shopped in a base exchange was in 1989, when he completed his six-year stint in the Marine Corps. He recalls saving 10 to 15 percent on department store goods and that shoppers paid no sales tax. 

Last month, Cornelius began to enjoy those advantages again as one of 12,000 or so “beta test” participants for veterans' online exchange shopping, which is to open for millions of honorably discharged veterans on Veterans Day, Nov. 11. 

All veterans are being encouraged to take the same first step Cornelius did by confirming veteran eligibility status at https://www.vetverify.org. It might be a multi-step process, if the Defense Manpower Data Center lacks information to verify a veteran served and received an honorable discharge. 

But for Cornelius, it went smoothly. He also got an email inviting him to be a test participant and begin to shop immediately through four exchange service portals: www.shopmyexchange.com for Army & Air Force Exchange Service (AAFES); www.mynavyexchange.com for Navy exchanges; www.mymcx.com for Marine Corps stores; and www.shopcgx.com for Coast Guard exchanges. 

Cornelius said his email invitation was timely. He had lost his sunglasses and the replacement pair of Ray-Bans, priced at a local retail outlet near his Texas home, would cost $180. Using AAFES online to comparison shop, he found a special sale, $20 off any pair of sunglasses costing $100 or more. 

“So I got that discount,” he said, “plus it was 10 to 15 percent cheaper than retail, plus tax-free, plus free shipping. I wound up paying about $120 total, saving me quite a bit.” 

His wife then used his benefit, shopping for undergarments that were on sale with a major retailer, but out of stock in the sizes and colors she wanted. AAFES had them, and she saved money too, he said. Soon they were buying sportswear for their son. Every item was timely shipped, he said, and arrived three days later. 

“It was great. It was super easy. And the vetverify.org process took five minutes. I entered my full name, the last four of my social [security number], and it said 'You've been verified.' ” 

By early July, 90,000 veterans had attempted to register to exchange shop online starting Nov. 11. Twelve percent of them got invitations to shop immediately. AAFES was monitoring shopping patterns to ensure their online portal and distribution system are ready for waves of new shoppers this fall, said Ana Middleton, president and chief merchandising officer for AAFES. 

“My worst fear,” said Middleton, “is a tsunami on November 11th, if everybody decides, 'Hey, I'm going to check this out' and they sign on that day” and also at the same moment. 

AAFES is building website capacity to allow for 30,000 simultaneous shoppers at any given time. A lot of shoppers “would have to be signing on at that exact same millisecond to stress it out. So yes, I feel that we are sized appropriately.” 

Of “beta” veterans shopping, surveys showed their top reason was the tax break. But a surprisingly close second reason, said Middleton, was an appreciation that exchanges support military quality-of-life and base support programs. 

Exchange use profits to pay staff salaries, fund store operations, and ensure adequate website capacity - but even more profits are distributed to on-base Morale, Welfare and Recreational activities including child development centers, fitness centers, outdoor recreation, and, overseas, on-base school lunches. 

 “Everything is just turned back to our customers,” Middleton said, and “not paying anything to any shareholders” as retail stores must. 

Besides discounts and tax breaks, AAFES online promises a price match. 

“If we are not the lowest price -- say you found a vacuum cleaner below our price at Walmart -- you can challenge our price, and we will match it,” she said. 

Shoppers will find prices particularly attractive on certain items like premium running shoes and children's clothing. Profit margins on electronics are narrow everywhere, so exchange prices “are close to comparable,” Middleton said. 

Exchange services aren't sure how many veterans ultimately will shop online. AAFES will be pleased if one to two million do so, Middleton said, though “we probably don't need that many” to declare the effort a success. 

In its business plan, as leading advocate for opening exchanges online to veterans, AAFES estimated its annual sales would climb by $185 million to $525 million and earnings would increase by $18 million to $72 million, easing budget pressure on the Army and Air Force, which have had to divert more and more appropriated dollars to family support programs as on-base store sales have been hit by force drawdowns and store closures overseas. 

Veterans with only Reserve or National Guard experience have asked if they too will be viewed as “veterans” for online shopping. That remains unclear. Last December, Congress did bestow honorary “veteran” status on Reserve and National Guard retirees who completed careers of drill time but had not completed an active duty period under Title 10 to meet the legal definition of “veteran” and receive a DD-214 “Certificate of Release or Discharge from Active Duty.” 

Reserve retirees 60 and older do have exchange shopping privileges. But what about Reserve and Guard veterans who didn't retire or didn't receive a DD-214? Here's what AAFES could tell us:  

“The litmus test for access to the veterans online shopping benefit resides with each veteran's electronic records. All honorably discharged veterans, according to official government sources such as the Defense Manpower Data Center, are considered authorized to shop military exchanges online via the veterans online shopping benefit. Veterans can confirm their eligibility by visiting VetVerify.org.” 

Veterans who do shop online, said Middleton, will find products “competitively priced. Are we across the board lower than everybody? No.” 

Beta shoppers so far have focused, as expected, on “male-dominated” categories such as electronics, running shoes, and sports apparel. Baby care, children's clothing, and cosmetics, however, also are selling briskly. 

“The reality is [married couples] share in the purchase-making decisions,” Middleton said. “It's like if I had a Costco card, and my husband didn't -- would he still want to make buying decisions with me if I came home and said, 'Hey there's a great price on a TV?' Probably. But this benefit is afforded to the [veteran] military member. ... If your spouse is using your password we have no way of knowing.” 

Merchandise selection is wider online than in base stores. The only goods veterans are barred from purchasing are military uniform items. 

Exchanges are delighted to be offering this new benefit, Middleton said, particularly to so many veterans who didn't get to enjoy it more while serving. 

“The sad reality is so many of these kids went to basic [training] and then to war, so their recollection of who we are is a Coke and bag of chips in a war zone. Do they have an understanding of the breadth of products we sell?” 

Soon, many more of them will. 

 To comment, write Military Update, P.O. Box 231111, Centreville, VA, 20120 or email milupdate@aol.com or twitter: Tom Philpott @Military_Update

 

 

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