Dead Ringers Survey Takes Issue with Consumer Watchdog Groups

 Funeral Service Insider

Thomas A. Parmalee
Funeral Service Insider

Not all direct cremations are equal – and it’s incredibly foolish for consumer advocate groups like the Funeral Consumers Alliance and Consumer Federation of America to suggest such a thing.

That is the gist of a report issued by Dead Ringers, a data-based mystery phone shopping service that secret shops funeral homes and cemeteries throughout North America. The report is in response to a January study that FCA and CFA conducted on a joint basis. A Dead Ringers survey found comparable results to the study conducted by the consumer watchdog groups—with 21 percent of Washington, D.C., funeral homes posting funeral home prices online (as opposed to 27 percent found in the FCA/CFA study). However, Dead Ringers also found that most funeral homes – 62 percent – disclose pricing over the phone even if the caller does not specifically ask about price.

Dead Ringers recommends funeral homes post prices online to boost transparency, but the company thinks the consumer watchdogs are seriously mistaken in suggesting that there should not be a wide variation in price when it comes to direct cremation – responding to the consumer groups’ complaint of finding a direct cremation range of $1,295 to $7,295 in their own study.

“If we were to call every hotel in Washington, D.C. ... and we asked for a standard queen-sized room – wouldn’t we get a vast range of prices?” asks Poul Lemasters, a licensed funeral director, attorney and owner of Lemasters Consulting, who co-founded Dead Ringers with his friend, Cole Imperi, creative director of Doth and and adjunct faculty member at Mid-America College of Funeral Service. (Will Oldham is also a part owner.)

Lemasters adds, “Wouldn’t we also expect and want hotels to have different prices for the same type of room due to many different factors? It would be like comparing a queen-sized room in a 1-Star hotel to a queen-sized room in a 4-Star hotel. There would absolutely be a price difference, a difference in service and quality – even though every room would have a queen-sized bed within it.”

Dead Ringers also cites the Federal Trade Commission’s own language in explaining why direct cremation prices can vary so widely. According to the FTC, the nondeclinable basic service fee is “The fee for the professional services of the funeral director and staff that are added to the total cost of funeral arrangements. This basic services fee can include a charge for the services performed in conducting the arrangements conference, planning the funeral, securing the necessary permits, preparing the notices and coordinating the cemetery or crematory arrangements.

This fee also may include overhead that you have not allocated elsewhere.” (Dead Ringers notes that the FTC allows the basic service fee to either be a nondeclinable fee or the fee for services and overhead can be included in the price of the caskets. The company notes that most providers handle this under the first option – listing their fee as a nondeclinable fee.)

“Why is the basic service fee important?” Lemasters asks. “Because, by definition, this fee includes all the costs a funeral home incurs for such common things as getting paperwork filed, making arrangements, plus overhead. It is not hard to imagine that the basic service fee could be, and typically is, different from business to business. And it makes sense, as no business has the same overhead costs or employee costs for providing services.”

While the basic service fee is a critical point in understanding how direct cremation is represented, it’s not the only factor. “We see a wide variance among funeral home basic service fees and direct cremation fees across the United States, says Tyler Yamasaki, CEO of Parting, which includes a portal that reveals funeral home pricing.

When price shopping funeral homes, throughout the United States, “We also see a variance between funeral home sizes, location, aesthetics, all of which explain why costs can be different,” Yamasaki says.

In its report, Dead Ringers goes on to note, “The basic service fee is also important because it serves as the foundation for pricing direct cremation. When determining the price for direct cremation, a provider’s basic service fee must be included. The funeral provider has the choice, per the FTC, to either include their entire basic service fee, or if they believe the entire basic service fee is not appropriate, then the funeral provider can charge a portion of their basic service fee. But this fee is determined based on the provider’s costs, which varies. Some funeral homes are brand new facilities while some are old facilities, some have a handful of employees while others had dozens, some are online providers while others have 10,000-plus square feet of physical space. All of these items can affect the prices a funeral home may charge.”

Pricing is also not the only factor someone considers when making a purchase decision, Imperi adds. “It goes back to the hotel analogy – some people choose a 1-Star room for the night while others might choose a 4-Star,” she says. “Their reasons for doing so are all just as unique as the differences between the hotel room choices themselves.”

Dead Ringers notes that its survey of funeral homes, which like the FCA/CFA study focused on firms in Washington, D.C., showed a median price of $1,995 for direct cremation – with 56 percent of firms pricing themselves at or below 10 percent of the median. There was a $6,550 range between the highest and lowest price, with the highest-priced firm being just over seven times the lowest-priced funeral home. “The data shows that approximately 50 percent of both funeral homes and hotels exist within a common median price. The data alsoshows that there are high-priced and low-priced providers outside the median and average price. Finally, the data shows that outliers (the high- and low-priced businesses) are comparably the same distance from the median,” according to Dead Ringers’ report.

The bottom line is that services and products in any service category are very different – and consumers should have the option and right to decide what they are willing to pay, according to Dead Ringers.

Not everyone agrees.

Josh Slocum, executive director of the Funeral Consumers Alliance, responded to the Dead Ringers report by reiterating that there is no reason for such a wide price range for direct cremation.

“Direct cremation includes picking up the body from the place of death, completing and filing the paperwork, getting the body to the crematory and returning the ashes to the family,” he says. “How would a direct cremation at location A be so different from a direct cremation at location B that justifies a $3,000 price difference?”

Slocum continues, “(Lemasters) doesn’t say. He asserts, repeatedly, that some funeral homes have nicer facilities than others. That is true. But it does not explain his claim that these direct cremations are fundamentally different, or provide a different service, than less expensive ones.”

Mentioning the basic services fee to explain the price variance does not show what, exactly, makes the expensive direct cremation a different, better service, Slocum says. “It merely means the funeral home’s service fees are higher. I’m not clear on how this is supposed to ‘explain’ why one direct cremation is ‘a better service’ than another,” he says.

It all seems like a lot of effort to distract from the plain fact that prices range so widely as to be nonsensical from a consumer perspective, according to Slocum. “Hand-waving about locations and hotels doesn’t change that,” he says.