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TOPIC: FTC Rules on Funeral Packages

FTC Rules on Funeral Packages 28 Aug 2010 12:16 #376

Some funeral homes offer packaged services that contain most of the basic necessities for a certain type of service. These packages sometimes come with a discount as an incentive to pick the package instead of purchasing a la carte. I was wondering if there are any laws, such as by the FTC, that say the package cannot be altered in any way in order to receive the discount. I have been told that in order to get the discount, nothing in the package can be taken out, even if I don’t need it or want it.
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Re:FTC Rules on Funeral Packages 29 Aug 2010 09:39 #377

I'm pretty sure no "rules" or laws cover that. However, what most people don't realize is the most funeral homes are just barely making it. If you are assertive enough you can likely negotiate with them for what you really want as opposed to what they want for you. Worst case, take your business to one that will negotiate. We have 2 FH in our town og 50,000. I live a few blocks from both but on the same street as one. They are lucky if they service two deaths a week.
John
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Re:FTC Rules on Funeral Packages 29 Aug 2010 11:01 #378

  • northstar73
  • northstar73's Avatar
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  • Licensed Embalmer and Funeral Director
Excellent question about packaging, let me elaborate on what I know.

"I was wondering if there are any laws, such as by the FTC, that say the package cannot be altered in any way in order to receive the discount."
NO - The FTC does not regulate what can be altered in a package. The FTC actually requires four packages on a GPL, but most consumers do not realize it. The Immediate Burial, Direct Cremation, Forwarding of Remains, and Receiving of Remains are in essence packages as they group a number of services into one charge. There is one gray area, however, to watch for. As the FTC requires funeral homes to accept third party merchandise, you CANNOT tie your package and discount to a purchase of a casket or other merchandise (the discount can then be viewed as a casket/merchandise handling fee if you provide your own instead). You can make a casket part of the package, but if you disqualify the package for ANY item that is removed, then you have not tied your discount to any particular item or service in it and the package is acceptable to the FTC.

"I have been told that in order to get the discount, nothing in the package can be taken out, even if I don’t need it or want it."
This is correct. Think about packages for everything else in life that we buy. From fast food combo meals to cars, packages are part of marketing. If you do not wish to have or use any element in the package, you still get it as part of the whole. What becomes the issue then is whether the value of what you do not want or will not use becomes more than the package savings. If the value of what you do not want IS more than the discount, then itemize. If the discount is more than the value of what you do not want, then you are still getting everything for less than your itemized price. It never hurts to ask though if you can substitute something in place of what you do not need. Perhaps you do not want the "limo" in the package, but really want full color memorial programs. Will the funeral home provide the full color programs at no cost in exchange for not using the limo? It never hurts to ask!

Ironically, packages are really not new to funeral service. Before the funeral rule of the early 80's, many funeral homes offered "unit pricing". When you went into a casket selection room, all the caskets had one price on them. That figure was not just for the casket, but for the casket PLUS all of the services of the funeral home for a traditional funeral (this was back when the majority of funerals were of the same type of service, not the plethora of options that have been arrived at today). The funeral rule REQUIRED funeral homes to itemize. The packaging that is being done now is really done for many reasons: simplicity to the family in choosing services, profit, simplicity in stocking and managing inventory for the business, etc... but in all cases, you can always itemize if you wish.

Finally, one area that many funeral homes are none compliant on is just how they structure their prices. Many have itemized prices higher than their "package" price. For example, they may say their total traditional funeral is $3295, but if you add the itemized figures up, it would total $3850. This is common for funeral homes to do, and in many cases, isn't even tied to any merchandise, it is just the services total. If they do this, they do violate the FTC guideline for not disclosing their usual and customary charges... or as the FTC site puts it...

BEGIN COPIED TEXT
The itemized prices on your General Price List, as well as your Casket Price List and Outer Burial Container Price List, should be accurate and up-to-date. These prices should reflect the prices that you actually charge your customers.

Of course, you can offer a discount when there are special circumstances, such as arrangements for a friend or relative or a family that otherwise could not afford your services. The Rule does not prevent you from doing this. However, you should not inflate the prices on any of your price lists in order to offer all or most of your customers a discount. In that case, the "discounted" prices would be the accurate prices and should be reflected on the price lists.
END COPIED TEXT
"Show...
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Re:FTC Rules on Funeral Packages 30 Aug 2010 09:59 #379

A couple of things -

John's right that package discounts are allowed, and there's no law that says funeral homes have to allow you to alter the package and still receive the discount.

Northstar, however, is not correct (I wish you were!) about funeral homes not being allowed to tie the discount to the purchase of a casket. The FTC has issued a series of vague and contradictory advisory opinions on this. In brief, the FTC says funeral homes *may* include a casket within a "discounted package", and the FTC won't consider that "discount" a built-in handling fee. No, it makes no logical sense, and yes, tying a discounted package to the purchase of a casket is, in fact, a casket handling fee in reality (since you pay more item by item if you bring in your own casket), but the FTC allows it.

If you want the gorey details, see this advisory ruling:

www.ftc.gov/bcp/edu/microsites/funerals/...ions/opinion09-1.pdf
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Re:FTC Rules on Funeral Packages 02 Sep 2010 16:43 #386

I really appreciate all the great information. From what I have heard, I am curious if the funeral home I am working with would get into any trouble if they were to make some exceptions for me by removing certain items from a package while still offering me the discount? I would hate to get anyone into any trouble while I try to negotiate the best price.
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Re:FTC Rules on Funeral Packages 03 Sep 2010 10:33 #391

"From what I have heard, I am curious if the funeral home I am working with would get into any trouble if they were to make some exceptions for me by removing certain items from a package while still offering me the discount?"

No, no one will get in trouble. Let me clarify:

1. The entire point of the FTC Funeral Rule is to stop funeral homes from *forcing you to buy a package*, not the other way around.

2. The Funeral Rule mandates that funeral homes itemize - that is, let you pick and choose only the goods and services you want. That means, obviously, that they must let you put together a roster of only what you want. So, of course they're legally able to delete any items that you don't want.

3. There is NO legal rule that says funeral homes can't alter a package - exactly the reverse is true.

I suspect you're getting some common misinformation about the Funeral Rule, either from an undertaker, or from someone who's uninformed. You can trust my interpretation - I'm a well-known expert on the Rule and have worked with the FTC for years.

Josh Slocum
Executive Director
Funeral Consumers Alliance
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