Army & Air Force Exchange Service
| Company type | Non-appropriated fund entity |
|---|---|
| Industry | Retail and services |
| Predecessor | Post exchange system |
| Founded | June 6, 1941 (as Army Exchange Service) |
| Headquarters | Dallas , United States |
Area served | United States, over 30 countries, and four U.S. territories |
Key people | Tom Shull (Director and CEO) |
| Products | Department stores, convenience shops, dining establishments, military apparel outlets, theaters |
Number of employees | 25,700 (2024) |
| Website | www |
Army & Air Force Exchange Service
The Army & Air Force Exchange Service (commonly known as AAFES, or referred to as The Exchange, post exchange/PX, or base exchange/BX) operates retail outlets and provides services across U.S. Army, Air Force, and Space Force bases globally. Its operations include department stores, convenience shops, dining establishments, military apparel outlets, and theaters, serving locations throughout the United States, over 30 countries, and four U.S. territories. Headquartered in Dallas, Texas, the organization is led by Director and CEO Tom Shull. As the largest exchange service within the United States Department of Defense, AAFES ranks 51st on the National Retail Federation’s Top 100 Retailers list.
Beyond retail offerings, the Exchange supplies military personnel with combat uniforms at cost and annually provides roughly 3.4 million school meals for children enrolled in Department of Defense Dependents Schools overseas.
Starting on Veterans Day, November 11, 2017, online shopping privileges at military exchanges were extended to approximately 18 million honorably discharged veterans. By 2020, in-store shopping access was granted to disabled veterans, Purple Heart recipients, and select caregivers. Additionally, since May 1, 2021, employees of the Department of Defense and Coast Guard have been authorized to shop both in physical stores and online.
Origins
For over a century prior to the establishment of the post exchange system, itinerant vendors called sutlers supplied American military personnel with various goods and services during wartime. These sutlers supported soldiers at Army encampments dating back to the French and Indian and Revolutionary conflicts.
During the Civil War, numerous complaints arose regarding sutlers charging excessive prices for inferior products. In response, the War Department introduced the post trader system in 1867. Although designed to curb the dishonest practices of sutlers, this system still exposed troops to inflated costs and was plagued by bribery and corruption.
On November 29, 1880, Colonel Henry A. Morrow created the first American military canteen at Vancouver Barracks in an effort to address disciplinary issues caused by soldiers frequenting disreputable entertainment venues in nearby towns. This facility offered troops access to newspapers and magazines, billiards and card games, as well as light refreshments—all without leaving the post.
The concept proved highly effective, prompting other frontier posts to open similar canteens that not only served as social hubs but also provided affordable daily essentials. In 1889, the War Department issued General Orders No. 10, empowering commanding generals to establish canteens on army installations. Much like today’s exchange system, these canteens operated primarily on a self-sustaining financial model.
By February 1892, the secretary of war mandated that these canteens be renamed "post exchanges," due to the negative connotations associated with the term "canteen," which was linked to immoral conduct in foreign military establishments. By 1895, post exchanges had largely supplanted post traders on Army bases.
Early developments
On July 25, 1895, the War Department issued General Orders No. 46, instructing commanders at all military posts to establish a post exchange "wherever practicable." These exchanges fulfilled two primary objectives: first, to offer troops reasonably priced everyday items—such as clothing and consumables not provided by the Government—and to provide opportunities for wholesome leisure activities; second, to generate profits that could be used to enhance the welfare of the broader military community.
For nearly half a century, post exchanges functioned autonomously under the supervision of each post’s commanding officer, resulting in significant variability among locations. While the War Department did not directly manage these operations, commanding officers were responsible for overseeing their financial integrity. Additionally, the Inspector General’s office conducted annual audits of the exchanges.
With the onset of World War I and the rapid expansion of the U.S. Army, it became apparent that the existing post exchange framework was insufficient to support such a large-scale mobilization. Gen. John J. Pershing sought assistance from civilian service organizations to provide overseas canteen services; however, these groups lacked the necessary resources and expertise to fully support troops deployed abroad.
Centralization
As preparations for World War II intensified, the War Department sought ways to modernize its outdated post exchange system. Following an evaluation of current operations, Lt. Col. J. Edwin Grose determined that the Army would need to operate "an extensive chain store system with worldwide branches" to adequately serve wartime demands. In April 1941, a panel of five leading retail executives endorsed this approach, recommending the establishment of a centralized body to manage exchange activities.
Consequently, on June 6, 1941, the Army Exchange Service (AES) was formed. Later, on July 26, 1948, AES was renamed the Army & Air Force Exchange Service (AAFES) to reflect its continued support of the Air Force, which had become an independent branch under the National Security Act of 1947 enacted the previous September.
Since its inception, the Exchange has participated in fourteen major military campaigns—including World War II, Korea, Vietnam, Grenada, Panama, the Balkans, and Operations Enduring and Iraqi Freedom—as well as numerous humanitarian missions and disaster relief efforts.
Structure and funding
As a component of the Department of Defense, the Exchange is overseen by a board of directors who report to the secretaries of the Army and Air Force via the Chiefs of Staff. Operating as a non-appropriated fund entity, the Exchange maintains financial independence through revenue generated from its goods and services sales.
The Exchange’s board consists of 13 members, including notable figures such as Lt. Gen. Caroline M. Miller, who serves as Deputy Chief of Staff for Manpower, Personnel and Services for the U.S. Air Force; alongside Sergeant Major of the Army Michael Weimer and Chief Master Sergeant of the Air Force David A. Flosi.
Earnings
All profits produced by the Exchange are reinvested entirely into military communities. Roughly 60% of these earnings are allocated to support programs that enhance military quality of life, while the remainder funds new store developments and facility maintenance without imposing any financial burden on the federal government.
In 2024 alone, Exchange customers contributed $295 million toward installation quality-of-life initiatives. Over the past decade, the Exchange has delivered $15 billion in benefits to military personnel and their families, including substantial funding for essential Quality-of-Life programs.
Stores
The Exchange manages a network exceeding 5,500 locations worldwide, encompassing main retail stores, convenience outlets, military apparel shops, and theaters across more than 30 countries and four U.S. territories.
Contemporary base and post exchanges—known as BX in Air Force and Space Force installations and PX in Army facilities—offer tax-exempt merchandise featuring well-known brands such as Sunglass Hut, Old Navy, Gap, Aerie, and American Eagle to authorized customers. In 2023, a partnership with The Home Depot enabled tax-free appliance purchases through ShopMyExchange.com and select physical store showrooms. By May 2025, this collaboration expanded to include power tool kits, outdoor power equipment, grills, gardening tools, ceiling fans, and additional products. Furthermore, in 2024, Bass Pro Shops was named the official outdoor gear supplier for the Exchange. Many Exchange locations also feature concession malls hosting diverse vendors and retail outlets.
Beyond retail, the Exchange operates over 1,600 dining establishments such as Subway, Qdoba, Panera, Panda Express, Burger King, Freshens, Popeyes, Taco Bell, Pizza Hut, Charleys Philly Steaks, and Starbucks, along with more than 3,400 concession operations. While shopping privileges at Exchange stores are restricted to authorized individuals, restaurant dining is open to all patrons.
All dining venues promote healthier menu options under the Exchange’s BE FIT 360 initiative focused on comprehensive wellness. This program also includes fitness apparel and equipment offerings as well as on-base health services such as optometry, dental care, chiropractic treatment, and other wellness resources.
Authorized Shoppers
The Exchange extends shopping privileges to a range of eligible individuals, including Active Duty service members, personnel from the Reserves and National Guard, retired members of the U.S. uniformed services, recipients of honors such as the Medal of Honor and Purple Heart, disabled veterans along with specific caregivers, honorably discharged veterans (with online access only), as well as Department of Defense and Coast Guard civilians, among others.
Employees
Globally, the Exchange employs roughly 25,700 team members across locations in the United States, Europe, the Pacific region, and the Middle East. Veterans and military spouses constitute approximately 45% of its U.S. workforce. In recognition of its commitment to military families, the Exchange was ranked No. 1 Military Friendly Spouse Employer for both 2023 and 2024, earning a Military Friendly Employer designation from Viqtory Media—the publisher behind G.I. Jobs and Military Spouse magazine—for 14 consecutive years, including receiving the Gold Award in 2024. Additionally, it has appeared on U.S. Veterans Magazine’s "Best of the Best" list for eight consecutive years.
Since 2013, nearly 65,000 veterans and military spouses have joined the Exchange’s workforce. Furthermore, since 2010, close to 2,300 Wounded Warriors have been employed by the organization. Overall, about 80% of Exchange employees have a direct connection to military service members.
The Exchange provides competitive compensation and benefits tailored for veterans and military spouses, featuring programs like the associate transfer initiative that supports military spouses in maintaining their careers while relocating between duty stations.
Since 9/11, over 4,900 Exchange associates have been deployed to combat areas such as Iraq and Afghanistan to assist troops engaged in active operations. Presently, the Exchange manages more than 300 facilities within contingency environments across countries including Kuwait, Iraq, Saudi Arabia, Jordan, Qatar, United Arab Emirates, Romania, Cyprus, Bosnia, and Kosovo.
Civilian leadership
In 2012, Tom Shull was appointed as the Exchange's inaugural civilian director and CEO. Prior to this role, he held executive positions at companies such as Wise Foods, Hanover Direct, Barneys New York, and Meridian Ventures. A graduate of the West Point, Shull served as an infantry company commander and undertook assignments at both the White House and the National Security Council. Traditionally, leadership of the Exchange was entrusted to a two-star general with a background in supply and logistics.
During his leadership, Shull has prioritized promoting national brand merchandise, growing the network of Express convenience outlets, enhancing the Exchange’s digital platform, and implementing cost-saving measures. These initiatives have aimed to boost profitability and increase dividends directed toward military quality-of-life programs funded by those earnings.
Additionally, Shull has played a key role in expanding access to first-run films in military theaters by establishing collaborations with leading movie studios.
Veterans online shopping benefit
On 8 May 2014, Shull authored a memorandum addressed to the Under Secretary of Defense for Personnel and Readiness, advocating for extending online shopping privileges at military exchanges to honorably discharged veterans.
He subsequently presented the business rationale for this veterans online shopping benefit before the Department of Defense’s Executive Resale Board in August 2014. The board reached a unanimous decision in August 2016 to endorse the proposal.
The Department of Defense announced on 13 January 2017 that starting 11 November 2017, all honorably discharged veterans would gain access to tax-free online shopping through military exchanges. This expansion opened up online exchange shopping privileges to approximately 18 million veterans.
Enhanced in-store shopping entitlements
Starting 1 January 2020, the Exchange extended in-store shopping rights to disabled veterans, recipients of the Purple Heart, and specific caregivers—totaling approximately 4.1 million individuals across the United States.
These privileges were broadened to include all veterans with service-connected disabilities, Purple Heart recipients, former prisoners of war, and primary family caregivers of veterans enrolled in the Department of Veterans Affairs' Program of Comprehensive Assistance for Family Caregivers.[1]
This expansion was mandated by the Purple Heart and Disabled Veterans Equal Access Act of 2018, which was incorporated into the John S. McCain National Defense Authorization Act for Fiscal Year 2019. The Department of Defense publicized this change on 13 November 2019.[1]
In addition to Exchange stores, this newly eligible group gained access to commissaries and morale, welfare, and recreation retail outlets situated on U.S. military bases.[1]
From 1 May 2021 onward, civilian employees of the Department of Defense and Coast Guard within the continental United States became authorized to shop at military exchanges, with online shopping benefits introduced in October 2021. This inclusion enhances Quality-of-Life initiatives, capitalizes on the purchasing power of military exchanges, and reinforces benefits for Soldiers, Airmen, and Guardians.[2]
Disaster assistance
In response to the September 11 terrorist attacks, the Exchange deployed mobile field Exchanges (MFEs)—53-foot convenience stores on wheels—to support first responders at locations such as the Pentagon and World Trade Center throughout New York City.
The Exchange has consistently supported military personnel during natural disasters. During the 2017 hurricane season, it provided aid to regions impacted by Hurricanes Harvey, Irma, and Maria. This included deploying an MFE at the request of the Texas State Guard, enabling National Guard members to obtain essentials like water, batteries, beef jerky, shampoo, and sports drinks.[3] A second MFE was established shortly thereafter in Corpus Christi, Texas.[4]
Ahead of Hurricanes Irma and Maria, shipments containing bottled water and emergency supplies—including generators, batteries, flashlights, tarps, gas cans, and first-aid kits—were dispatched to Florida, Georgia, and Puerto Rico.[3][4]
Following Hurricanes Florence and Michael in 2018, thousands of battery packs, cases of water, generators, gas cans, and flashlights were delivered to military bases situated along storm paths.[5] The Exchange also provided support during Hurricane Dorian and Typhoon Lingling in 2019; earthquakes in Puerto Rico; Hurricane Laura in 2020; and Tropical Storm Ida in 2021.[6] In 2024, assistance was extended to service members affected by Hurricane Helene at Fort Eisenhower and Moody Air Force Base, as well as Hurricane Milton at MacDill Air Force Base and Patrick Space Force Base. Support measures included deploying an MFE stocked with snacks, beverages, hygiene products, along with fuel shipments and generator support for facilities lacking power or fuel.[7]
During the COVID-19 health crisis, the Exchange catered to thousands of quarantined troops following travel restrictions by implementing a personal shopper service with contactless delivery at multiple military installations. Additionally, MFEs were deployed to military field hospitals providing pandemic relief efforts—including the Javits Center in New York City.[8]
Currently, the Exchange maintains a fleet of 13 MFEs along with two mobile barber shops ready for deployment whenever disaster relief is required.[9]
Military Star card
The Exchange manages and finances the Exchange Credit Program (ECP), a congressional initiative launched in 1979 aimed at shielding military personnel from predatory lending. According to a Bankrate report from September 2024, the Military Star card offers the second-lowest interest rate among retail-branded credit cards, surpassed only by Amazon's Secured Card, which requires an initial deposit. The Military Star card features a uniform APR applied to all users.
In July 2024, ECP revealed a partnership with the Discover Global Network to enhance the Military Star card’s security measures and broaden its acceptance across military bases. The refreshed cards, distributed throughout late 2024, incorporate EMV chip technology, contactless payment options including tap-to-pay and mobile wallet integration, and are accepted by on-base merchants such as concessionaires, dining establishments, food delivery services, third-party vendors, and selected Morale, Welfare and Recreation programs.
See also
- Base exchange
- Canex, Canadian counterpart
- NAAFI, UK equivalent
- Navy Exchange
References
- ↑ 1.0 1.1 1.2 Cite error: Invalid
<ref>tag; no text was provided for refs namedDoD - ↑ "Department of Defense Expands Access to Military Exchanges". U.S. Department of Defense. Retrieved 26 August 2022.
- ↑ 3.0 3.1 Cite error: Invalid
<ref>tag; no text was provided for refs named:1 - ↑ 4.0 4.1 Cite error: Invalid
<ref>tag; no text was provided for refs namedalamogordonews.com - ↑ Cite error: Invalid
<ref>tag; no text was provided for refs named:2 - ↑ "Army & Air Force Exchange Service 2021 Mission Report" (PDF). aafes.com.
- ↑ "Exchange Annual Report 2024". corpcom.aafes.com. Retrieved 2025-06-12.
- ↑ "The pandemic challenge for Dallas-based AAFES: Keep the U.S. military safe while shopping". Dallas Morning News. 22 July 2020. Retrieved 24 May 2023.
- ↑ "Exchange Deploys Mobile Field Exchange to Assist with Recovery Efforts in Florida". DVIDS. Retrieved 23 January 2019.
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