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Wisconsin trade group tries to undo “combo” ban

UDATE 3/11/2012—The bill has died in committee. 


1/11/12—
Once again cemetery owners are trying to undo the state’s ban on combination funeral home/cemetery businesses. Representative Evan Wynn is sponsoring LRB 3490. And their arguments sound reasonable on the surface: consumers will get one-stop shopping and economies of scale will lower prices. And if it were any other business, those would probably be true. But the death business is unique. Consumers are largely unaware of their options and legal rights, and those who arrange funerals when the death occurs are not often thinking clearly and rationally. There’s simply too much potential for abuse. 

  • Many people believe they’re obligated to use the funeral home located on the cemetery’s grounds. A surprising number of consumers who’ve contacted FCA believed this, whether the cemetery implied it or not. Combo businesses know this, and it insulates them from having to compete on price or service since they have a market that thinks its captive. 
  • Combo businesses owned by large chains are well-known to aggressively steer consumers toward spending all their funeral money on-site. Given that these chains are usually among the highest-priced in a given area it’s easy to see how grieving families can be persuaded to overspend. One California family told FCA the chain-owned cemetery where they intended to bury their mother refused to let them use the on-site chapel—even though the family was willing to pay for it—unless they used the funeral home for all services. The family refused, noting the prices were sky high, and found a family-owned funeral home that accommodated them for less. 

Then there’s the matter of regulation. The Federal Trade Commission’s Funeral Rule compels funeral homes to give consumers printed, itemized prices, the option to buy services a la carte, and the right to bring in outside merchandise such as a casket without financial penalty. The Rule does not apply to cemeteries, and the results have been appalling (see FCA’s congressional testimony here and here). 

The cemetery interests’ newly formed Wisconsin Organization for Responsible Consumerism (yes, really) cagily evades the issue in a statement to Wisconsin legislators:

All existing federal and state consumer protections and licensing requirements would apply to any funeral home jointly owned with a cemetery. 

Yes, but not to any cemetery. We’ve seen too many instances where a funeral home employee puts on his cemeterian’s hat and brings the family out to tour the grounds. No price list. No right to purchase merchandise elsewhere. No ban on misrepresenting legal requirements. 

Finally, undoing the ban would give combo businesses an unfair economic advantage. Why? Because cemeteries in Wisconsin don’t pay taxes. What a great deal for the parent company! Once again, WORC avoids the issue by claiming the cemetery owners would pay taxes “for the land that the funeral home would occupy.” In other words, the tiniest portion of the property. Meanwhile the for-profit company has far lower operating costs because it’s shifted those onto taxpayers. It’s doubly outrageous when you remember the original reason states exempted cemeteries from taxation was that they were viewed as a public good that should be run without profit motivation. For a cemetery/funeral business to exploit this historical circumstance is offensive.