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About AAFES: The Army & Air Force Exchange Service

AI Summary: The Army & Air Force Exchange Service (AAFES) has served military communities since 1895. Operating over 3,100 retail facilities in 30 countries, the Exchange generates $8.2 billion in annual revenue and returns 68% of its earnings to Morale, Welfare, and Recreation programmes. ShopMyExchange is the official online extension of that mission — providing tax-free retail to active duty, retirees, veterans and their families.

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Army and Air Force Exchange Service headquarters and retail operations serving military families worldwide

A Legacy of Service: 1895 to Today

The Exchange's story begins at the end of the 19th century, when soldiers at remote frontier posts had no access to basic goods at reasonable prices. What started as a modest canteen operation is now one of the largest retailers in the United States.

Founded by General Order No. 46

On 25 July 1895, the War Department issued General Order No. 46, establishing the post exchange system across all Army installations. The directive was simple: provide soldiers with everyday necessities — tobacco, toiletries, snacks, stationery — at cost or modest markup, with profits reinvested into post welfare funds. Within five years, exchange operations had expanded to include clothing, footwear and household goods. By the time the United States entered World War I, the exchange system was an indispensable part of military life.

The Air Force Exchange was formally established in 1947 when the U.S. Air Force became an independent branch. In 1950, the two systems merged into the Army & Air Force Exchange Service (AAFES), headquartered in Dallas, Texas. That consolidated organisation has operated continuously for over seven decades, surviving budget constraints, base realignment rounds, and the rise of e-commerce — adapting to each era while keeping its core mission intact.

Historical photograph of early Army post exchange canteen operations circa 1900
Modern Exchange retail store interior with electronics and home goods departments

$8.2 Billion in Annual Revenue

Today, the Exchange generates approximately $8.2 billion in annual revenue across all channels. That figure encompasses main retail stores (known as PX on Army posts and BX on Air Force bases), convenience shops, gas stations, food courts, barber shops, laundry facilities and the ShopMyExchange online platform. The Exchange ranks among the top retailers in the United States — larger than Nordstrom and comparable in scale to major department store chains.

Unlike civilian retailers, the Exchange operates as a non-appropriated fund instrumentality (NAFI) of the Department of Defense. It receives zero tax-dollar funding for day-to-day operations. Every dollar of revenue comes from sales to authorised military shoppers. This self-sustaining model means the Exchange must compete on price, selection and service while simultaneously fulfilling its congressionally mandated mission to support military quality of life.

AAFES by the Numbers

The scale of Exchange operations spans five continents and impacts millions of military families every year.

$8.2BAnnual Revenue
3,100+Retail Facilities
30Countries
68%Earnings to MWR

3,100+ Facilities in 30 Countries

The Exchange maintains a global retail footprint that mirrors the worldwide presence of the U.S. military.

Domestic Operations

Within the continental United States, the Exchange operates on every major Army and Air Force installation. From Fort Liberty in North Carolina to Joint Base Lewis-McChord in Washington state, military families have access to full-service retail stores, gas stations, food courts and specialty shops. Each main store typically ranges from 50,000 to 180,000 square feet and carries electronics, clothing, home goods, sporting equipment, uniforms and personal care products. Convenience shops and Express locations provide quick-access shopping on smaller installations and in troop areas.

Overseas and Contingency Operations

The Exchange operates in 30 countries on five continents, including major facilities in Germany, Japan, South Korea, Italy, and the United Kingdom. These overseas stores are often the only source of American goods for military families stationed abroad. During contingency operations, the Exchange deploys tactical field exchanges — mobile retail units that deliver essential goods to service members in forward-deployed locations. From Afghanistan to the Horn of Africa, Exchange personnel have operated in every major theatre of operations since Desert Storm.

68% of Earnings Support Military Quality of Life

The Exchange exists not to generate shareholder returns but to fund the programmes that make military life sustainable for families.

The MWR Dividend

Approximately 68% of Exchange earnings are distributed directly to Morale, Welfare, and Recreation (MWR) programmes across Army and Air Force installations. Since 1914, cumulative MWR contributions have exceeded $2.4 billion. These funds support fitness centres, youth sports leagues, libraries, arts and crafts centres, outdoor recreation areas, and community events. When a military family uses the base gym, attends a free movie night, or enrols a child in summer camp — the Exchange helped make that possible.

The remaining earnings are reinvested into Exchange operations: store renovations, technology upgrades, distribution infrastructure, and employee training. This reinvestment cycle ensures the Exchange can continue offering competitive prices and modern shopping experiences. Every purchase at ShopMyExchange contributes to this cycle — shopping at the Exchange is itself an act of supporting the military community.

Employment and Economic Impact

The Exchange employs approximately 35,000 associates worldwide, making it one of the largest employers within the Department of Defense enterprise. A significant portion of Exchange employees are military spouses and family members, providing stable employment that can transfer across installations during PCS moves. The Exchange also employs local nationals at overseas locations, contributing to host-nation economies and strengthening community relations around military bases.

Beyond direct employment, the Exchange supports thousands of vendor and supplier relationships with American manufacturers and distributors. The Exchange's purchasing power — driven by $8.2 billion in annual sales — allows it to negotiate competitive pricing that benefits military shoppers while sustaining a broad ecosystem of domestic suppliers.

ShopMyExchange: The Digital Mission

ShopMyExchange extends the brick-and-mortar Exchange experience to every authorised shopper with an internet connection.

Launched to meet the needs of a mobile military population, ShopMyExchange offers the full Exchange catalogue online with the same tax-free pricing available in physical stores. Service members deployed to remote locations, military retirees who no longer live near an installation, and the more than 20 million veterans eligible under the Veterans Online Shopping Benefit can all access Exchange merchandise through the website.

The platform ships to all APO, FPO, and DPO addresses at domestic USPS rates, ensuring parity between stateside and overseas shoppers. The MILITARY STAR card integrates seamlessly with online checkout, and the Exchange's price-match guarantee applies to online purchases. For military families, ShopMyExchange is not just an e-commerce site — it is the digital embodiment of a 130-year-old commitment to those who serve.

Account creation requires a DoD ID number for identity verification, ensuring that the tax-free benefit remains restricted to authorised shoppers as required by federal law. Veterans who do not hold a current military ID can verify their eligibility through the Department of Veterans Affairs portal. Once verified, the shopping experience is identical to that of active duty members — full catalogue access, tax-free pricing and worldwide delivery.

The Exchange continues to invest in its digital infrastructure, expanding product selection, improving mobile experience and integrating new fulfilment options including buy-online-pick-up-in-store (BOPIS) at participating locations. As the military community evolves, ShopMyExchange evolves with it — maintaining the same standard of service that has defined the Exchange since 1895.

People Also Ask

When was AAFES founded?
The Army & Air Force Exchange Service traces its origins to 25 July 1895, when the War Department issued General Order No. 46 establishing the post exchange system. The Army and Air Force exchanges merged in 1950 to form AAFES as it exists today, headquartered in Dallas, Texas. Learn more on our About AAFES page.
How much revenue does AAFES generate annually?
AAFES generates approximately $8.2 billion in annual revenue across all operations — main stores, convenience shops, food courts, gas stations, and online sales through ShopMyExchange. This places the Exchange among the top retailers in the United States.
Where does Exchange profit go?
Approximately 68% of Exchange earnings go directly to Morale, Welfare, and Recreation (MWR) programmes on military installations. Since 1914, cumulative MWR contributions exceed $2.4 billion. These funds support fitness centres, youth programmes, libraries and community events for military families.
How many Exchange facilities exist worldwide?
The Exchange operates more than 3,100 facilities in 30 countries on five continents. These include main retail stores (PX/BX), convenience shops, gas stations, food courts, barber shops and specialty outlets on Army and Air Force installations worldwide.
Is AAFES a government agency?
AAFES is a non-appropriated fund instrumentality (NAFI) of the Department of Defense. It operates under DoD authority but receives no tax-dollar funding. The Exchange is entirely self-sustaining through retail sales to authorised military shoppers.