Eight reasons funeral directors (almost) always have the upper hand Presented by AMBIS A Funeral Consumers Alliance

Based on research reported in What Families Know About Funeral-Related Costs: Implications for Social Work Practice by Mercedes Bern-Klug, David J. Ekerdt, and Deborah Schild Wilkinson, Health & Social Work, Vol. 24, No. 2, May, 1999

1.People who make final arrangements are typically in crisis and overwhelmed by grief

Federal Trade Commission, 1984 “…the emotional trauma of bereavement, the lack of information, and time pressures place the consumer at an enormous disadvantage in making funeral arrangements.”

2.Final arrangements are usually expensive and most consumers think that this is just the way it is everywhere

What do typical funerals cost?  United States - $ 5,400  England - $ 1,650  France - $ 2,200  Australia - $ 2,100  Austin area - $6,000

Why do funerals cost so much? 1. Non-declinable fee (averages over $1400 in Austin area; $1200 nationally) 2. Consumers do not shop for funerals 3. Funeral homes are typically under-used 4. Consolidation and monopolization of the industry 5. Marketing methods and strategies are used to manipulate consumers

3.The finality of the decisions is unlike most other purchases

4.There are usually time pressures to make quick decisions

5. Confusion about purpose  help survivors accept the death  pay honor to the life that was lived  prepare to face life without the loved one

What words would you use to describe a Funeral Director?

Salesman

6. Seller is more experienced than buyer

Sales training courses for Funeral Directors “Cremation Word Power” Goal: “To get a family beyond an inexpensive option”

“Preneed Profit Workshop--Proven strategies to boost marketing success and close more contracts”

“Marketing Strategies: Developing the Winning Edge”

New Sales Opportunities Aftercare® and the Aftercare® Planner Marketed by Service Corporation International (SCI) to help families with the organization and handling of their financial affairs after a death

How funerals are sold 1. Appeals to emotion 2. Appeals to social status 3. Appeals to family pride 4. Appeals to guilt and remorse 5. The three caskets gambit: grouping 6. Appeals to artificial quality -expensive woods or metals -expensive linings -innerspring mattresses

From Etiquette by Emily Post, 1942 “The wrong type of (funeral) director will … do his best to hypnotize the family into believing that the more expensive the casket (and) the more elaborate the preparations, the greater the love and honor shown the deceased.”

AARP Advice  Some providers may try to -shame you -make you feel guilty -make it hard for you to choose a lower-cost alternative  Buy only what you planned  The amount you spend on a funeral is not a reflection of your feelings for the deceased

Funeral Directors SELL

7. People are not sure what is expected of them (etiquette)

Etiquette issues for the family  Is it in poor taste to compare funeral home costs?  Should I bargain with a funeral director over the price of a casket or other charges?  Is it acceptable to decline permission to have a loved one embalmed?  With whom, besides the funeral director, can one discuss the need for a sealed vault?  Is spending too little a sign of disrespect or lack of love for the deceased? [continued]

 Should we have a time for visitation? If so, when and for how long?  How should we set up the visitation? With the body? Where?  What should I say to people who come to visit or bring food?  What should I say to people who don’t like our religious or ethnic customs or practices?  How do I deal with my emotions during conversations? [continued]

 Should I ask people to make a donation to a charity instead of sending flowers?  How should I dress for the visitation and the funeral?  What do we tell children about the funeral or death?  Should everyone be invited to the cemetery?  Who should be invited to gather for a meal after the service?  What will people think about how the the casket looks?

What causes the stress  The uniqueness contributes to the stress  Usually a grief-stricken family member oversees the arrangements  All of the survivors are under stress  The funeral home environment is unfamiliar  People are not sure what is expected of them (etiquette)  Lack of knowledge increases the stress

8. Lack of knowledge increases the stress for participants A. Price information can give you some perspective

Body Disposition Alternatives  Body donation ($0-$1,000)  Cremation ($175-$8,000)  Burial ($30-$100,000)  Earth burial  Mausoleum interment  Private crypt interment  At sea

CREMATION PRICES IN AUSTIN AREA (from January 2004 survey)  AMBIS Members – $595  All Faiths – $ 725  A Simple Tradition – $745 (after 1 day)  Austin-Peel & Son – $790  Cook-Walden – $1945 (5 locations)  Pennington – $2609  Thomason – $2700  Austin-area average – $1603

18 GAUGE CASKET PRICES (Models with gaskets)  Wholesale price – $  Retail prices  All Faiths – $1440  A Simple Tradition – $1495  Mission – $2900  Angel – $2995  Cook - Walden – $2695  Austin-area average – $2300

PRICES OF SELECTED OUTER BURIAL CONTAINERS  Wood box – $  Plain concrete grave liner – $  Lined concrete OBC – $425-11,800  12 gauge steel OBC– $ (includes steel, galvanized steel, stainless steel)  Solid copper, 12 gauge – $ ,000  Solid copper, 10 gauge – $11,299-15,900

B. Knowledge about the law can prevent unwanted or unneeded decisions

The Centers for Disease Control and Prevention and other public health authorities in the U.S. and Canada report no public health reasons for embalming.

“(I)t is a deceptive act or practice for a funeral provider to … fail to disclose that embalming is not required by law except in certain special cases, if any.” Source: §203.8 Rules and Regulations, Texas Funeral Service Commission & FTC Funeral Rule

Embalming “(The purpose of embalming) is to make the corpse presentable for viewing in a suitably costly container.” Jessica Mitford, The American Way of Death

Alternatives to embalming  Refrigeration (34 to 40 degrees)  Leak-proof, odor-proof container  Dry ice  Disposition within 24 hours of death

C. Knowledge about alternative arrangements allow more meaningful choices Public viewing of the body and visitation with the family does not have to be done at the funeral home

Memorial Services “A memorial service performs much the same function as a funeral service, but tends to have a more positive atmosphere. This is mainly because it is focused on the values of the person who has died instead of on the dead body.” Ernest Morgan, Dealing Creatively With Death

D. Knowledge about consumer rights can make you less vulnerable to exploitation

FTC Funeral Rule (selected provisions) 1. Prices provided by telephone 2. Written price lists provided before prices discussed 3. Services must be sold on a “per service” basis 4. False claims about merchandise are prohibited 5. False statements about legal requirements for embalming are prohibited 6. May not claim that casket is required for cremation 7. Casket-handling fees are prohibited 8. Consumer must be given itemized statement of goods and services selected

E. Knowledge about your options can save you and your family money [See handout – Practical Ways to Reduce Funeral Costs]

F. Knowledge about prepaying can help you find a better way

Preneed contracts in Texas Over $2 Billion in existing contracts (January, 2001)

Types of Preneed Contracts (for funerals and cemeteries) 1. Trust-funded 2. Insurance-funded 3. Annuity-funded

PITFALLS OF PRENEED CONTRACTS 1. Consumer loses control of money [article and FAQs]

PITFALLS OF PRENEED CONTRACTS 1. Consumer loses control of money 2. Consumer loses ability to make changes without financial penalties

PITFALLS OF PRENEED CONTRACTS 1. Consumer loses control of money 2. Consumer loses ability to make changes without financial penalties 3. Consumer may have to pay taxes on interest earned by funeral home

PITFALLS OF PRENEED CONTRACTS 1. Consumer loses control of money 2. Consumer loses ability to make changes without financial penalties 3. Consumer may have to pay taxes on interest earned by funeral home 4. Consumer can be charged interest on the unpaid balance of a contract 5. 6.

PITFALLS OF PRENEED CONTRACTS 1. Consumer loses control of money 2. Consumer loses ability to make changes without financial penalties 3. Consumer may have to pay taxes on interest earned by funeral home 4. Consumer can be charged interest on the unpaid balance of a contract 5. Caskets cannot be described adequately to prevent manipulation later by unscrupulous providers 6.

PITFALLS OF PRENEED CONTRACTS 1. Consumer loses control of money 2. Consumer loses ability to make changes without financial penalties 3. Consumer may have to pay taxes on interest earned by funeral home 4. Consumer can be charged interest on the unpaid balance of a contract 5. Caskets cannot be described adequately to prevent manipulation by unscrupulous providers 6. Death of a consumer while away from home will make use of contract more expensive

Pay now to beat inflation  Funeral industry is changing dramatically  In the past, prices were never advertised  Today, there is open price competition  This has resulted in lower prices at many funeral homes  New trend: No price guarantees in preneed contracts

“Peace of Mind”  After purchasing a preneed contract, many consumers tell their families, “I’ve taken care of everything.”  But, there are at least 21 items that cannot be included in a preneed contract. They include  Items that cannot be anticipated, and  Items that are supplied by third parties and are not within the control of the preneed funeral home

Unanticipated items 1. Extra embalming charges after an autopsy 2. Extra embalming charges after organ or tissue donation 3. Costs of restoration after disfiguring deaths 4. Special cosmetic procedures needed because of the condition of the body 5. Unexpected refrigeration costs when there are delays 6. Expenses of an outside funeral director when death occurs away from home 7. Receiving remains from another funeral home when death occurs elsewhere

Third-party costs 1. Opening and closing the grave 2. Police escorts 3. Obituaries 4. Crematory fees 5. Floral arrangements for the casket 6. Clergy honoraria 7. Costs of an outside facility for the service 8. Cemetery charges for setup of chairs and awning 9. Government-required permits 10. Vault installation at the cemetery or mausoleum 11. Charges for an inurnment service at a columbarium 12. Charges for extra certified copies of the death certificate 13. Charges for music and/or for musicians 14. Beautician charges

Other factors to consider  Most people don’t think they will change their minds, but they often do  People move (health; to be near family members)  They remarry  They die while traveling  They decide on cremation, rather than body burial  They decide to donate their bodies for medical research

Alternatives to Preneed Contracts 1. Establish a joint account with an Agent 2. Establish a “Totten trust” account (Pay On Death) 3. Buy a jointly-owned certificate of deposit 4. Name an Agent as beneficiary of paid-up insurance 5. Establish a formal trust 6. Complete the “Final Arrangements Form” 7. Donate your body to medical science

Kiplinger’s advice on cemetery preneed contracts: “Don’t buy!” 1. Because you become a captive customer 2. Because your family may not get what you paid for 3. Because you can get stung if you decide to cancel 4. Because you have little recourse if the cemetery runs out of money From Kiplinger’s Personal Finance Magazine, May 1999

What you can do to reduce the FD’s advantage: 1. Learn about funeral consumers’ rights 2.Learn about disposition and service options 3.Learn about the costs of funeral-related products 4. Make plans now 5.Make sure your family knows about your plans 6.Determine funding for your plans