Teresa McUsic

Shop around so funeral homes don’t make a killing

Prices for funeral services can vary by thousands of dollars from funeral home to funeral home, according to a report by the Consumer Federation of America and the Funeral Consumers Alliance.
Prices for funeral services can vary by thousands of dollars from funeral home to funeral home, according to a report by the Consumer Federation of America and the Funeral Consumers Alliance. The Dallas Morning News

Shark Tank investor Kevin O’Leary made an interesting comment recently on the show about consumer spending.

“I like three times in people’s lives: when they’re born, when they get married and when they die, because they throw caution to the wind on pricing,” he said.

Sadly, there are many companies that take advantage of poor decision-making based on emotions, but that doesn’t mean you have to buy in.

Last week, the Consumer Federation of America and the Funeral Consumers Alliance came out with a report that looked at one of the worst culprits — the funeral industry.

They studied 150 funeral homes in 10 markets that showed pricing for the same services varied by thousands of dollars in each area. In addition, the report showed that the industry’s lack of transparency makes it difficult for consumers to compare prices.

The survey sample showed that in every market the price of a full-service funeral could cost two to three times more at one funeral home than another. For example, in Atlanta, full-service funeral prices ranged from $3,370 to $11,050.

The prices ranged significantly for cheaper burial alternatives as well. Direct cremations ranged from $495 to $3,390 in Seattle; immediate burial without a ceremony or casket included ranged from $640 to $3,140 in Tucson, Ariz.

“The huge price ranges for identical funeral services within individual areas indicate that these markets lack effective competition,” said Stephen Brobeck, CFA executive director in a teleconference. “The lack of price competition is unfortunate given the relatively high cost of funeral services and the reluctance of many bereaved consumers to comparison shop for these services.”

But the range of pricing is only part of the problem. The other half is getting the pricing information. CFA found that of the funeral homes surveyed, only one quarter fully disclosed prices on their websites, while 16 percent failed to fully disclose prices both on their website and in response to an email and a phone call.

The Federal Trade Commission routinely discovers the same disclosure problems on site.

This year, investigators working undercover in six states found failures to disclose pricing information to consumers, as required by the agency’s Funeral Rule, in 27 of the 100 funeral homes they visited. The agency said that since the Funeral Rule Offenders Program began in 1996, the FTC has inspected more than 2,900 funeral homes, and found 503 homes with violations.

A look at 15 funeral homes in Tarrant County found only three companies posted prices on their website and just one posted the standard General Price List required to be given to potential customers by the FTC. The FTC’s rule does not require disclosure on the Web.

Jim Sanders, owner and funeral director at Jim’s Funeral Home in Fort Worth, said he posts the price list on his website because he has nothing to hide. A simple funeral costs $2,795 with a casket; basic cremation is $745.

“People need to shop for a funeral like they shop for a car. The prices are so different,” he said. “Don’t fall for the ‘You have to do it today’ sales pressure tactic. You do have time.”

Cremation has become extremely popular, Sanders said, which can cause a problem for funeral homes with high overhead because it is generally cheaper than a casket.

“Especially if you have a million-dollar funeral home, you have to make so much revenue per person that comes in to support a staff of 20 or 25,” he said.

Bob Davis, the owner and funeral director of Davis Funeral Chapel, also posts his prices. A direct cremation costs $750, while a full funeral service is $2,199.

“My father died, and we paid an exorbitant price for the casket, so I started a budget casket business,” he said. “Then my customers lobbied for us to do the entire funeral.”

Davis, who was trained and received his license in 1998, does not have kind words for the industry.

“The funeral business is one of the most crooked businesses in the world,” he said. “There was a poster on the wall of my school that said, ‘No crying, no buying.’”

So go into funeral shopping with a clear head, and you may save some money along the way.

Teresa McUsic’s column appears Saturdays. TMcUsic@SavvyConsumer.net

Getting help

▪  The Funeral Consumers Alliance of North Texas lists nine funeral homes that offer cremation for under $1,000. The alliance also offers shopping tips on its website, www.FCANT.org.

▪  For those looking into a prepaid plan, the Texas Department of Banking describes how those contracts should work under Texas law on its website, www.prepaidfunerals.texas.gov

▪  The Federal Trade Commission has a series of articles on shopping for funeral services at www.consumer.ftc.gov. Search for funerals.