Startups Shed Light on the Dark Industry of Funeral Services

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May 29, 2019

By Spencer Feingold

Price aggregators are commonplace when shopping for hotels or flights, but consumers have long struggled to navigate the opaque pricing of funeral services. Multiple startups, however, are working to support bereaved consumers and bring competition into the industry.

"We have a history of grieving families showing up at funeral homes, not knowing if they are at the right place that will serve their needs and no idea what the prices will be," Ed Michael Reggie, the CEO of Funeralocity, told Cheddar in an interview Wednesday.

Funeralocity is a free platform that allows consumers to search and compare prices for everything from caskets, embalming, funeral homes, and cremation providers. The site has services listed in over 100 metropolitan areas in all 50 U.S. states.

Other price aggregating platforms include Parting, which also works with social workers in hospitals and hospice to provide accurate funeral planning information directly to the families of the deceased. Both Parting and Funeralocity are recommended by the American Association of Retired Persons, better known as the AARP.

"We all know that when someone is in a grief-stricken place they are not going to make the best decisions," Reggie said.

The costs of funeral services have largely been hidden and subject to change, which leaves consumers susceptible to unfair pricing practices — 85 percent of funeral homes and crematories across the U.S. don't list their prices online, according to Funeralocity.

The lack of transparency leads to a wide range of pricing within the industry. A 2017 study from the Consumer Federation of America (CFA), a consumer advocacy group, found that Dignity Memorial — the largest funeral services brand in the U.S. — had median prices that were 47 to 72 percent higher than at other funeral homes. Dignity Memorial did not disclose their prices online.

"Consumers charged high prices undisclosed online are not treated with dignity by the many funeral homes operated by Dignity Memorial," Josh Slocum, executive director of CFA's Funeral Consumers Alliance, said in a statement. "Consumers would be wise to patronize those funeral homes that allow easy price comparisons."

While startups like Funeralocity and Parting are relatively new, corrupt pricing has plagued the funeral industry for decades. In 1984, the Federal Trade Commission (FTC) established the "Funeral Rule," which mandates that businesses must provide their bereaved customers a list of set prices when asked in person or by phone. The 1980s pre-date the modern internet, of course, but the government chose not to update the rule in a 2008 review and many watchdog groups today say another review is long overdue.

In the meantime, sites like Funeralocity are working to shed light on the sector. Funeralocity also vets funeral homes and designates those that meet their standards as an "Excellence Provider."

"Shining a light on all this is really going to put everybody on an even basis and a fairer basis to make good decisions," Reggie said.