Honorably discharged vets will get to shop tax-free

OFFUTT AIR FORCE BASE, Neb. Hey veterans, you can soon shop taxfree.

Starting later this year, all honorably discharged veterans, no matter their branch of service, will be eligible to shop tax-free online at the Army & Air Force Exchange Service with the same discounts they enjoyed on base while in the military. It’s the latest way in which the organization is trying to keep its customers as the armed forces shrink and airmen and soldiers buy more for delivery.

Adding 13 million potential new customers will give extra ammunition to the group that runs the stores on U.S. Army and Air Force bases worldwide as it fights Amazon and other retailers for veterans’ online shopping dollars.

Since hiring its first civilian CEO five years ago, the Exchange has upgraded the brands at base stores to include items like Disney toys, Michael Kors fashions and other top names. Like private stores, it has also imposed tighter cost controls, reduced the number of employees and improved people’s experience on the website.

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

The Exchange is adding shipping centers within its stores to allow it to send products directly from those locations more cheaply and quickly. Twenty-six stores now ship orders, and that will expand to 55 by the end of the year.

Within the next three years, Shull said the goal is to deliver something on base within two hours of when it is ordered. That’s possible partly because the Exchanges are already on base, cleared by security.

The Exchange delivers most orders on the second day now. Shull said shipping from stores will make a big difference in regions around bases, which are often in more rural areas.

Expanding online shopping to all honorably discharged veterans is expected to add about $200 million annually within three years to the $8.3 billion in sales the Exchanges generated last year.

Adding those shoppers, what Shull called “the foundation of our growth,” is critical to help offset the 13 percent decline in the number of active-duty Army and Air Force soldiers since 2011 when the Exchange generated $10.3 billion revenue.