Why does the US military rip off its own people?

[bpp]

Happened to listen to Armed Forces radio this morning, and they mentioned that the "on-base exchange rate" is 111 yen/dollar. That's criminal! They are charging more than +/- 3 yen spread off the central rate (between 114 and 115 right now). Any bank off base would only charge +/- 1 yen spread. I'm not even sure they could legally charge the kind of spread that the US military does.

This seems very petty, and designed to rip off uninformed new arrivals. (I assume that nobody with either a clue or time to leave base would exchange money on base.) Why do they do it?

 

[JPatrick]

Generally the answer to your question Why does the US military rip off its own people, whether it relates to yen, pay, benefits, or anything else is because they can

 

[Cut-Throat]

Happened to listen to Armed Forces radio this morning, and they mentioned that the "on-base exchange rate" is 111 yen/dollar. That's criminal! They are charging more than +/- 3 yen spread off the central rate (between 114 and 115 right now). Any bank off base would only charge +/- 1 yen spread. I'm not even sure they could legally charge the kind of spread that the US military does.

This seems very petty, and designed to rip off uninformed new arrivals. (I assume that nobody with either a clue or time to leave base would exchange money on base.) Why do they do it?

Well, if you think that is bad, How about the veteran that loses a few limbs in Vietnam or Iraq and now has to fight the government for medical costs.

 

[yakers]

I don't know about that specific situation but when I was with the US Navy in London UK, they would exchange blocks of money every two weeks. There was a "fixed" rate until that money ran out. Occasionally clever employees would play the exchange rate for a few bucks. There was a limit on how much could be converted and it may have been all of $200 at a time. But it wasn't a bad system overall. Don't know how its done now but commercial banking is not likely to improve the exchange process as there tends to be transaction fees that would kill the small transfers.

 

[justin]

I'd borrow one of them big Army trucks, fill it full of yen, and trade it in at 111 Y per USD. Rinse and repeat!

 

[FlowGirl]

As far as I know the "yen rate" is for on base stores - like Burger King - that normally accept US dollars. I assume they mostly snag locals who work on base and don't normally carry US currency. Seems a much better deal than the exchange rate offered by the off-base Japanese stores that accept US dollars.

Everyone I know here just uses the ATM and the ones on base here will give you either currency. When I pulled yen out of the base ATM 2 days ago the exchange rate was 113.