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Veterans Law

Veterans to shop tax-free at online military exchanges

Robert Chisholm

July 26, 2017

Updated: November 20, 2023

veterans shop at Army Air Force Exchange Service

Starting this Veterans Day, November 11, 2017, all honorably discharged veterans, no matter their branch of service, will be eligible to shop tax-free online at the Army, Navy & Air Force Exchange Service. The online shopping benefit will give veterans access to the same discounts they enjoyed on base while in the military.

Expanding these online offerings to veterans is part of an effort to keep the Exchanges competitive as the armed forces shrink and servicemembers buy more for delivery. Since 2011, the number of active-duty Army and Air Force soldiers has declined by 13 percent. Fewer soldiers in the service and more soldiers buying from online retailers like Amazon means less business, making it harder to keep costs down for military personnel.

But with the addition of all honorably discharged veterans, the Exchanges could add nearly 13 million new customers. That could potentially bring in an additional $200 million every year within three years, according to the AP.  Last year, the Exchanges generated $8.3 billion in sales.

Changes at the Exchanges

Servicemembers have seen a number of changes to the Exchange’s business model in recent years. The Exchange hired its first civilian CEO five years ago. Since then, the stores have replaced their industrial feel and reliance on off-brand merchandise with a more modern look and well-known brand names. Exchanges now offer products like Disney toys, Michael Kors fashion, and Samsung appliances.

CEO Tom Shull implemented additional cost-saving, business-boosting measures like creating private stores, imposing tighter cost controls, reducing the number of employees and improving customer’s experience on the website.

“The intent is to really beat Amazon at their game because we have locations literally on the installations,” Shull told the AP. “We’re leaning toward not just ship-from-store but pick-up-from-store and eventually deliver-from-store.”

When Shull took on the role of CEO in 2011, the Exchange was projecting $180 million in losses. Last year, the Exchange reported earnings of $384 million.

The Exchanges and the Department of Defense

Though the exchanges operate mostly like an independent retailer, they are part of the Department of Defense (DoD). The exchanges don’t pay rent for their military base locations and the government transports some of their goods to foreign locations. About two-thirds of their employees are family members of active-duty soldiers and airmen.

Of last year’s $384 million profit, $225 million went back to the DoD to help fund quality-of-life programs on bases – like child development and fitness centers. In addition to the base stores, the Exchanges also operate more than 70 movie theaters and work with chain restaurants and other retailers for the shopping malls it operates on bases.

Great! But I have some questions…

Q: Who is eligible for this Exchange benefit?

A: All honorably discharged veterans and veterans with a general (under honorable conditions) discharge can shop at the online military exchanges. Your eligibility is based on your most recent character of discharge. So if, for example, you were honorably discharged from the Air Force but later discharged from the Army under other than honorable conditions, you would not be eligible for the online shopping benefit.

Veterans from all service branches are eligible. This includes veterans of the United States Air Force, Army, Navy, Marines and Coast Guard as well as the Air Force Reserve, Army Reserve, Navy Reserve, Marine Corps Reserve, Coast Guard Reserve and National Guard.

Q: How do I sign up?

A: To sign up for the online shopping benefit, you must first verify that you are in fact a veteran. To do this, you’ll have to visit The website uses data from the Defense Manpower Data Center (DMDC) to verify your service and character of discharge. The verification process may take a little while because not all of the DMDC records are digitized, so you may want to start sooner rather than later.

Q: When can I start shopping with the discount?

Once verified (see above), you can start shopping on Veterans Day of this year: November 11, 2017.

According to, a select group of randomly-chosen veterans who verify early may be invited to participate in the benefit as Beta testers before Veterans Day. In exchange for granting early access, the online exchanges may request participants’ feedback in the form of brief surveys.


Happy shopping!

About the Author

Bio photo of Robert Chisholm

Robert is a Founding Partner of CCK Law. His law practice focuses on representing disabled veterans in the United States Court of Appeals for Veterans Claims and before the Department of Veterans Affairs. As a veterans lawyer Robert has been representing disabled veterans since 1990. During his extensive career, Robert has successfully represented veterans before the Board of Veterans Appeals, Court of Appeals for Veterans Claims, and the United States Court of Appeals for the Federal Circuit.

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