Investing in your benefit
FORT LEE, Va. (April 14, 2016) – The commissary surcharge – the 5 percent added to every customer's bill – is not a tax. That's just one of several facts about the surcharge that even some of the savviest commissary customers are sometimes surprised to learn.
"Some people erroneously call the surcharge a tax, but this generalization is inaccurate and misses the point," said Defense Commissary Agency Historian Dr. Pete Skirbunt. "A tax could be spent on any of multiple government programs or projects with no way of telling which ones. Commissary surcharge dollars, however, may only be spent on building, modernizing and maintaining commissary facilities and store equipment."
Examples of surcharge spending include the new commissaries nearing completion at Fort Belvoir, Virginia, Spangdahlem Air Base, Germany, and Naval Air Station Jacksonville, Florida – all paid for with surcharge dollars. The grand opening of the $26 million Spangdahlem commissary is set for May, the $36 million Jacksonville commissary grand opening is expected later this summer, and the $38 million Fort Belvoir commissary is expected to open early next year.
"People are surprised to learn that the surcharge first appeared in 1879, and its history features various applications and rates through the years leading up to 1983 when it was set at 5 percent, and hasn't changed since," Skirbunt said.
Here are some surcharge facts provided as DeCA prepares to observe two anniversaries: the 25th anniversary of the agency officially standing up October 1, 1991; and 150th anniversary of the modern commissary benefit, which began July 1, 1867, with the at-cost sale of food to enlisted men and officers at posts across the country. Between then and now, there's plenty of surcharge history:
- Today, the overall commissary shopper savings includes the surcharge.
- The first surcharge appeared in 1879 to pay for spoilage and transportation costs. Set at 10 percent, it was levied on all commissary goods except tobacco, and was repealed five years later.
- From 1923 to 1927, Congress directed that commissary customers pay "the customary overhead costs of freight, handling, storage and delivery. The word "surcharge" was never used, but that's what the price increase constituted. It stopped in 1928.
- The modern surcharge began in 1952 when Congress decided commissaries should be more self-supporting. Congress and the Defense Department directed the military services to have commissaries add a 2 percent surcharge to cover costs of purchasing and maintaining equipment and supplies.
- Through the 50s, 60s and 70s, the surcharge rate fluctuated and varied among the military services, which ran their own separate commissary systems. It was set at 5 percent for all in 1983.
"Commissaries are an excellent deal for customers due to the high level of savings the stores provide because we sell at cost plus the surcharge," Skirbunt said. "For our customers, the surcharge enhances the commissary benefit by helping to modernize, improve and maintain their stores."
About DeCA: The Defense Commissary Agency operates a worldwide chain of commissaries providing groceries to military personnel, retirees and their families in a safe and secure shopping environment. Commissaries provide a military benefit and make no profit on the sale of merchandise. Authorized patrons purchase items at cost plus a 5-percent surcharge, which covers the costs of building new commissaries and modernizing existing ones. By shopping regularly in the commissary, patrons save thousands of dollars annually. A core military family support element, and a valued part of military pay and benefits, commissaries contribute to family readiness, enhance the quality of life for America's military and their families, and help recruit and retain the best and brightest men and women to serve their country.
Kevin L. Robinson
(804) 734-8000, Ext. 4-8773