For the funeral industry, the COVID-19 pandemic has meant flush times.
Revenues have surged at Service Corporation International, the largest such
chain in the U.S., with more than 1,500 funeral homes and 400 cemeteries.
And “COVID impact,” according to a recent investor fact sheet, helped
SCI more than double its earnings per share
between 2019 and 2021.
Prices for funerals have always been steep. Funeral homes charged a median
of $7,848 for a viewing and burial last year,
according to the National Funeral Directors Association, and $6,970 for a cremation. Those costs don’t include the charges from
cemeteries, which can add thousands more.
ProPublica recently investigated one cemetery
whose charges could run into the tens of thousands of dollars.
The federal government has done little to regulate the industry.
Thirty-eight years ago, the Federal Trade Commission tiptoed into this
realm, mandating that funeral homes disclose their prices. But cemeteries,
some of which are overseen by states, were exempted from those rules. For
two years now, the FTC has been conducting a rare review of its rules and
examining a wide series of proposals, including extending its rules to
cemeteries, requiring that prices be posted online, and disclosing that
embalming is not legally required. Presented with a series of questions
about the status and timing of the process, an FTC spokesperson would say
only “the review is ongoing.”
Joshua Slocum, executive director of the
Funeral Consumers Alliance, the only
national consumer organization that monitors the funeral industry, has been
advocating for
changes to the FTC’s Funeral Rule
for decades. Regardless of what the agency decides, Slocum wants consumers
to know their rights, as well as have a few tips at their disposal when
preparing to put a loved one to rest.
This conversation has been edited for length and clarity.
Many people might be surprised to know that at least part of the death
industry is regulated. What is regulated and what isn’t?
Let’s talk about the federal [rules] because that’s most important to the
basics of what people need to know. There’s something called the Funeral
Rule, a regulation from the Federal Trade Commission, which gives consumers
particular rights, and they would be very wise to exercise these rights.
One, they have a right to get price quotes by phone.
Number two, when they go to a funeral home in person to talk about a funeral
arrangement, they have a right to a printed, itemized price list — think of
it just like a menu at a restaurant.
Number three, they have a right to pick and choose item by item. Funeral
homes are not allowed to offer you only a package. They will try to offer
you a package and they will often say, “You save money if you buy everything
together in a bundle.” But just like all bundles, you have to take a look
and see, is this actually something I would have spent money on, on its own?
Am I really saving money? Or am I just getting a bunch of things that I
wouldn’t have picked anyway?
What are the first steps to take after a loved one’s death?
Number one, remember that death is not an emergency. When death occurs, by
definition, that means the emergency is now over. The worst thing that can
happen has already happened. The person isn’t going to get any deader, to
put it plainly.
Get on the phone and call at least five different funeral homes within a 20-
to 30-mile radius of where the dead person is. Get price quotes. Take the
time to at least look it over and compare some of the prices before you
commit to having the funeral home remove the body. If the person dies at a
hospital, which is more common, you have more options. Ask the hospital if
the body can stay in the morgue for a couple of days while you make a
considered decision about which funeral home to call.
Two, take stock of your budget. You need to know that figure. Decide ahead
of time what you can comfortably afford. And for God’s sake, please don’t do
this: “Oh, money is no object. It’s my mother. She deserves the best,” and
then three months from now, you’ve got a $15,000 bill that you can’t pay.
What happens when you comparison shop?
Anytime you pick five or six funeral homes, all within the same city or
region, and you canvass them, you will find that there’s a price difference
of thousands of dollars for exactly the same service all within a service
area available to you. And you will not know this because the vast majority
of people will say, “Oh, well, we just use our family’s funeral home.” And I
will ask them, “Why is that the one you always go to?”
The bottom line is nobody has a family car dealer, nobody has a family
utility company, nobody has a family anything else. They compare prices and
services. The problem here is that because this is the death transaction,
and it’s a transaction we’re only going to sign a check for on average once
in our lives, we don’t have practice with it. And because it is the most
emotional business transaction we will ever encounter, many make the mistake
of thinking of the funeral home in the same emotional category that their
church lives in. That’s a mistake. Your funeral home is not your minister.
Your undertaker is not your counselor. Your undertaker is your car dealer
for death. And I do not mean that in an insulting way. I mean it in a
straightforward business way.
How did it come to be that funeral homes are governed by some federal
regulation, but cemeteries aren’t?
The cemetery regulation is so poor that I consider it an unregulated
industry, even if it is technically regulated under state law.
Cemeteries before the 20th century were never considered a capitalistic,
profit-making venture. They were, either by law or by community consensus,
conceived of as doing a public good, something closer to what the church
does. So they were seen as nonprofit community service entities that weren’t
subject to regular business regulation. That changed in the 20th century
when it did become possible in many parts of the country to run a for-profit
cemetery.
But the regulations never caught up. The same kinds of deceptive practices
that were documented that led to the Funeral Rule have always been going on
at cemeteries.
I think there’s very little chance that the FTC is going to bring cemeteries
under the funeral rule this time around. We’ve tried many times. There are
complicated reasons for it. One of the reasons is that many cemeteries in
many states are organized under nonprofit corporation law. The FTC does not
have jurisdiction over that, which is an actual genuine, systemic problem.
What kind of deceptive cemetery practices are you referring to?
The same things as what funeral homes did before the law changed. The FTC
rule doesn’t apply to cemeteries, so they don’t have to give out a printed
price list. They don’t have to let you pick a la carte. Many cemeteries get
up to nonsense games, like if you don’t want to buy that cemetery’s
headstone, they get sore that they’re not getting that profit out of you. So
if you go to a third-party monument dealer, the cemetery will tack on what
they will call an “inspection fee” that just happens to be the exact
difference in cost that they lost if you didn’t buy their stone.
What has changed now for the FTC to consider amending the Funeral Rule and
what needs to happen for some of these proposals to be implemented?
Well, the FTC needs to act. It’s been two years since the FTC announced that
they were reviewing the rule, and a review means considering changes. I
don’t have a lot of inside knowledge, but what I can say is in communicating
with the staff, I believe that they are taking this issue seriously. I
believe that they are seriously considering updating the rule to mandate
online pricing for funeral homes.
The current federal regulations entitle you to a paper price list if you
show up in person at the funeral home. We believe that funeral homes should
have to post their prices on their website. But until they do, you are
probably going to have to telephone shop.
Do many funeral homes post their prices online, even though it’s not legally
required at this point?
We, the Funeral Consumers Alliance and our partner organization, Consumer
Federation of America, have done two surveys on the rate of online price
posting. We did one in 2018, sampling 25 cities. We found only
16% of funeral homes posted their price lists online. We just did a new version of the survey, which was greatly expanded to a
sample size of 1,046 funeral homes in 35 different states, and
we only found 18% of them posting their prices. So no, most funeral homes hide their prices online.
Do you think the industry’s profits from COVID-19 will affect the FTC’s
decision?
I think our perception and reaction to COVID has played roles in most
things. One of the things that was really unfortunate for funeral consumers
is that COVID was exactly the period when an online price list would have
been most helpful to grieving families and we didn’t have it. People were
afraid to go into businesses in person, or there were actually state-based
restrictions about transacting business in person. So a lot of people were
making arrangements over the phone or in some long-distance way.
The big corporations, which own hundreds of funeral homes and cemeteries
across the country, are opposing changes to the rule — what’s their stated
reason? What’s your take?
Things like, “We believe that this is a very personal transaction, and we
believe it’s most appropriate for the price discussion to be had in the
traditional manner, and consumers aren’t shopping for price anyway, so
there’s no need for this.” That’s what they say. It’s not complicated. It’s
simply that they don’t want to be regulated. From my point of view, they
have a very weak case. First of all, requiring online posting of price lists
literally costs the funeral industry $0. Do you know what it costs them? It
costs them the time it takes to click that button that says “upload PDF.”
More broadly, how have multibillion-dollar conglomerates like SCI changed
the funeral industry?
Here’s the reality: They still only have about 12% of the funeral homes in
this country. And that’s been pretty steady over 20 to 30 years. In some
cities, places like Seattle, many cities in Florida, where there’s a heavy
concentration of elderly people, then SCI has a much greater percentage of
the market share. That is true. In those places, SCI particularly tends to
be the highest-priced funeral home in any market. So if it matters to you,
find out who owns your local funeral home. Just because it still says
McGillicuddy on the sign doesn’t mean Mr. McGillicuddy still owns it.
Are there practical things that consumers can do to bring the cost of a
funeral down?
The most cost-effective thing is to choose a funeral home that already has
reasonable prices. Your choice of funeral home is the No. 1 driver of cost.
Once you choose a funeral home, look carefully at their offerings and see
how much of it you can afford that’s within your budget. Remember that you
can shop a la carte. So if your budget says $2,000, you need to face
reality. $2,000 is not going to buy you a traditional funeral with
embalming, public viewing of the body, metal casket, graveyard burial. You
are not going to get that for $2,000 anywhere in the United States. That
means your choice is going to be something like simple cremation, even if
that’s not your favorite. People have to be realistic.
Is price negotiation ever an option? How would that work?
Yes, just the same way you would do it with any other business that you were
negotiating with. They don’t have to haggle with you, but you have the right
to do so. We get people who are like, “Well, the funeral home has already
picked up the body and we do like this funeral home, but they’re more
expensive than another one we found in town, we simply can’t afford it.” And
my suggestion is talk to the funeral director and say, “Listen, you’ve taken
good care of us before, we appreciate that you came to pick our grandmother
up, but we literally cannot afford your price on this direct burial. We
would love to give you our business. Can you meet your competitor’s price?
We realize you don’t have to lower your prices. But we would like to do
business with you. If you can’t lower your prices, we’ll have to have her
body removed to a different place.”
And that’s OK to do?
Well, why wouldn’t it be OK? Here’s what I hear underneath this, and I think
you’re channeling it correctly from people: What people are doing is asking
for permission. But you’re not breaking a social rule. You’re not being
cheap. I know what people are thinking: “I don’t want to do that. It’s
gauche. It means I don’t care about my mother.” Stop that. That’s nonsense
talk. If you showed how much you loved your mother by how much you spent on
her funeral, you’d go bankrupt. Love cannot be expressed by money.
Lastly, what are some of the biggest misconceptions about navigating this
process?
Most of what people think they are required to purchase is not true. For
example, many people think embalming is legally required if you’re going to
view the body. That is not true in any U.S. state. It’s also not true that
embalming is required as a condition of being buried in the ground. These
are in-house funeral home policies, not laws. So there’s very little that
you are legally required to purchase. Basically, the only thing that has to
happen, when a person dies, in order to satisfy the laws, there has to be a
death certificate signed by a doctor, the body has to be buried, cremated or
donated to anatomical science within a certain period of time, and that’s
literally all that is required. Everything else is optional.
Go into this transaction knowing that although it’s emotional, you are a
consumer, you get to decide what you put in your cart. You’re not obliged to
buy these things. These are choices and you should make choices that fit
your family’s budget and your family’s emotional preferences.
