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Expansion of online PX privileges could benefit 19M vets

Tom Shull, director and CEO of the Army and Air Force Exchange Service, is on a crusade to offer all honorably discharged veterans the opportunity for tax-free online shopping now available only to those with access to the stores at military bases.

The move would extend shopping privileges to 19 million additional veterans. Currently, only active duty personnel, retired career military and 100-percent-disabled veterans are eligible.

As a Vietnam-era U.S. Military Academy graduate, Shull says his motivation for extending the benefit of online PX shopping to the additional veterans is simple: “It’s the right thing to do.”

If his proposal finds favor with the Office of the Secretary of Defense, which could reach a decision soon, it would become the first new benefit offered to veterans since 1953.

Shull, who served as a 4th Infantry Division platoon leader at Fort Carson, Colorado, said he saw soldiers return from the Vietnam War broken by post-traumatic stress disorder and was struck by the unfairness of their situations.

“PTSD wasn’t acknowledged back then,” he said in a Skype interview last week from the exchange service’s headquarters in Dallas. “I felt so badly because the American people didn’t understand the sacrifice of Vietnam vets.

“So one of the reasons I came up with this idea was a way to welcome home all of those who we did not treat properly as a nation, and yet they served as well as any generation did in the past.”

Likewise, many new veterans from the global war on terrorism leave the service before they have served 20 years, which means they aren’t eligible to purchase discounted merchandise at post and base exchanges or shop online.

“It’s really hard to determine if 20 years is really the right benchmark with getting veterans benefits. It seems to me that’s somewhat arbitrary,” Shull said.

To make his initiative work wouldn’t require an act of Congress, only a change in a Department of Defense rule to add “honorably discharged veterans” to the “limited exchange privileges” table.

Reached Friday, a Defense Department spokesman, Lt. Col. Myles Caggins III, wouldn’t say if Defense Secretary Ashton Carter has an appetite for Shull’s initiative or how close the Pentagon is to making a decision on it.

“This proposal,” Caggins said in an email, “is still under consideration by the Defense Department.”


 

Regardless, Shull said he has the support of both the Senate and House Armed Services committees.

“We’ll have to work through some issues with OSD, (Office of the Secretary of Defense) which we are,” he said. “There doesn’t seem to be any insurmountable concerns at this point.

“We’ve already prebriefed both the House Armed Services Committee and the Senate Armed Services Committee, and they are very supportive of this initiative,” Shull said. “In fact they are anticipating that we meet the Dec. 15 deadline with the notice to Congress.”

That would set in motion a 30-day lapse period to move forward, with final approval possible as soon as Jan. 15.

If that happens, an expanded PX truck system — currently the 11th-largest U.S. retail fleet — could make its first deliveries from base warehouses on Veterans Day 2017 to distribution points near active posts and bases in the United States.

Merchandise, which generally sells at about a 20 percent discount vs. commercial retailers, could be picked up there or delivered to the homes of online veteran shoppers by commercial carriers that would compete for contracts.

Shull contends the “exchanges’ e-commerce businesses are proven and that expanding online shopping will increase revenue, which can be used to to pay for quality-of-life programs like fitness centers, child development centers and school lunch program overseas for military dependents.”

The exchanges project $18 million to $72 million in new annual earnings upon program maturation.

The exchange service currently has large distribution centers in Texas, Virginia and California. Combined, they support an $8.5 billion business.

“The online business is only $250 million but we can expand our capabilities, which we are in the process of doing to serve the online business,” he said. “We think it will be on the order of somewhere between a $1 billion and $2 billion business.”

Contact Keith Rogers at krogers@reviewjournal.com or 702-383-0308. Find him on Twitter: @KeithRogers2.

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