Blame it on the economy, or on ‘unfavorable secular trends’, but as cremation rates continue to rise, operators need to consider their General Price List and their non-declinable basic service fee. In many parts of the country, competition has driven the price of the direct cremation far below the charge that the funeral home requires for its basic professional services. It is the FTC’s position that the death care operator cannot discount its basic professional services fee, and this causes operators to question whether a cremation service can be priced below the basic professional services fee.
The FTC staff has issued informal opinions that except direct cremations from the “no discount rule”. But, operators enter into a gray area when they create cremation packages that offer more than a direct cremation, but cost less than the basic professional services fee.
In response to an inquiry about home funerals, the FTC staff opened the door to alternative basic professional services fees. The staff indicated that it would not object to a reduction in the basic services fees for home funerals if the reduction is commensurate with the limited use of the provider’s facilities and services. For those funeral homes that do not own a crematory, their role in the cremation is similar to that when assisting with a home funeral. Consequently, the FTC opinion would seem to allow these operators to offer an alternative basic fee for cremations.
Cremation societies often set the lowest cremation price in a community because they do not have the overhead of a funeral home. But when the family wants more than a direct cremation, the comparison of cremation packages becomes more difficult. Operations that compete for cremations should consider expanding their GPL to explain the various services that are included in the cremation packages.