Army and Air Force Exchange Service

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Army and Air Force Exchange Service

Type	Department store (government owned - customers must have a valid military ID card)
Founded	{{{foundation}}}
Headquarters	Dallas, Texas, USA
Industry	Retail
Products	department stores and franchises
Employees	47,323
Slogan	AAFES. Serving the best customers in the world!
Website	www.aafes.com

The Army and Air Force Exchange Service (or AAFES) is an agency of the United States Department of Defense. Its mission is to provide quality merchandise and services of necessity and convenience to authorized customers at uniformly low prices, and to generate reasonable earnings to supplement appropriated funds for the support of United States Army and Air Force Morale, Welfare and Recreation (MWR) programs. These contributions to the Soldier and Airman and their families make AAFES a major non-pay benefit to customers. AAFES is headquartered in Dallas, Texas and is commanded by a Major General. The position of AAFES commander rotates between the Army and Air Force. The Navy operates the equivalent Navy Exchange (NEX), while the Marine Corps operates the Marine Corps Exchange (MCX).

1 Mission
2 Controversy
- 2.1 Censorship
- 2.2 Pricing Discrepancies
3 See also
4 References
5 External links

[edit] Mission

AAFES is charged with generating reasonable earnings, but returns every cent to the customer. The only congressionally appropriated money spent in AAFES comes in the form of utilities and transportation of merchandise to overseas exchanges and for salaries of U.S. military personnel assigned to AAFES. A non-appropriated fund activity (NAF) of the Department of Defense, AAFES funds 98% of its operating budget, including civilian employee salaries, inventory investments, utilities and capital investments for equipment, vehicles and facilities, from the sale of merchandise, food and services to customers.

Roughly 67% of AAFES earnings are paid to MWR programs.^[1] As of 2004, $2.24 billion had been contributed by AAFES over a 10-year period to the Army and Air Force to spend on quality of life improvements for Soldiers, Airmen and their families--libraries, sports programs, swimming pools, youth activities, tickets and tour services, bowling centers, hobby shops, music programs, outdoor facilities and unit functions.

In Fiscal Year 2003, AAFES earned $355.3 million from direct sales (retail, food, and vending/services), finance revenue, and concessions on revenues of $7.9 billion. MWR and services programs received $229.7 million, which was distributed as follows:

U.S. Army, $138.1 million
U.S. Air Force, $79.4 million
U.S. Marine Corps, $11.9 million
U.S. Navy, $.3 million

The per capita dividend in 2003 was $262.72 for every Soldier and Airman.

In addition to funding MWR programs, AAFES earnings are used to build new stores or renovate existing facilities without expense to the federal government. Funds to construct these new or replacement facilities come entirely from sales of merchandise and services.

AAFES is also a major source of employment for members of the U.S. Army and Air Force family. Approximately 31% of the 47,323 AAFES associates are military family members. Many associates have worked for years with AAFES as they moved from one installation to another with their military sponsors. Another 1.9% of associates are military members who work part time in exchanges during their off duty hours.

AAFES operates thousands of facilities worldwide; AAFES has more than 12,000 facilities in more than 35 countries and in all 50 states. These include 3,150 retail facilities of which 205 are main stores on Army, Air Force, Navy and Marine Corps installations around the world.

In September 2006, the largest PX (Post Exchange) in the world partially opened on Fort Campbell, Kentucky. It is slated to be fully finished and operational by January 1st, 2007. This project will construct a 165,000 square foot (SF) expansion to the existing 107,400 SF shopping center. The end position will be 164,000 SF sales area, 18,800 SF food court with 458 seats, expansion of both food concepts and concession operations.

On its website, AAFES states its business aim is "to serve Soldiers, Airmen and their families around the world."

[edit] Controversy

[edit] Censorship

On May 9, 2001, The Stars and Stripes reported that AAFES would not stock American Terrorist: Timothy McVeigh & The Oklahoma City Bombing on its shelves, nor would they allow it to be special ordered by customers at their stores. Although AAFES has refused to sell other published materials, most of them were covered by the Honor and Decency Act, a Department of Defense policy. The story on Timothy McVeigh however, does not fall victim to that policy.^[2]

[edit] Pricing Discrepancies

Although AAFES facilities do not charge taxes on products (which includes excise taxes), tobacco and alcohol products are only marginally cheaper than retail stores that do. AAFES limits the lowest price for which tobacco and alcohol can be sold. For tobacco products sold CONUS, the cap is 5% less than the most competitive local price in the local community; for OCONUS, tobacco prices fall within the range of the CONUS market. Alcohol sold CONUS will be sold for no more than 10% less than the best price in Alcohol Beverage Control states, and no more than 5% less than the competitive rate at non Alcohol Beverage Control states. According to AAFES, these limits are set by the Department of Defense, per DoD Instruction 1330.9. According to the DoD, the purpose of this is to comply with the deglamorization of alcohol and tobacco policy.^[3]