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DoD: No Timeline on Opening Online Exchange to Vets

A Defense Department plan that would open online shopping at the exchange systems to all honorably discharged veterans has no timeline for completion, officials said.

"The Army and Air Force Exchange Service proposal to extend exchange online shopping benefits to honorably discharged veterans is being worked and continues to make progress through the Defense Department, said Air Force Maj. Ben Sakrisson, a Defense Department spokesman. "However, we are unable to specify a date when the department will make a decision on the proposal. As these recommendations are pre-decisional, it would be inappropriate to say anything more."

The proposal, originally submitted to the DoD by AAFES in spring 2014, also has the support of the Marine Corps and Navy Exchange services. It would allow all honorably discharged veterans to make purchases on the exchanges websites. It would not grant access to brick-and-mortar exchange stores, gas stations or Class Six locations.

Exchange officials have said there is a strong business case for opening online shopping to the about 18 million honorably discharged U.S. veterans. Giving them online shopping access could produce between $226 million to $1.13 billion in annual sales, the 2014 proposal says. The result could be 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.

A Defense Department report released early this month says that to implement the plan, the Defense Department needs to change its exchange patronage rules. That effort is currently being spearheaded by the Defense Resale Business Optimization Board.

Opening commissary shopping to honorably discharged veterans is not 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 five percent surcharge, increasing the customer base to all veterans would result in higher taxpayer costs under the current operating system, not lower.

-- Amy Bushatz can be reached at amy.bushatz@military.com.

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