1 Staff Opinion 97-3 (Apr. 16, 1997), available at http://www.ftc.gov/bcp/conline

/edcams/funerals/opinions/opinion97-3.pdf (concluding that only funeral goods and services that

must be itemized on a funeral provider’s General Price List (“GPL”) may be discounted).

2 73 Fed. Reg. 13740 (Mar. 14, 2008).

3 Id. at 13748.

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Division of Marketing Practices

Craig Tregillus Direct Dial: (202) 326-2970

ctregillus@ftc.gov Facsimile: (202) 326-3395

February 17, 2009

Pamela D. Griebel 

Assistant Attorney General

Iowa Department of Justice

Hoover Bldg.

Des Moines, IA 50319

Dear Ms. Griebel:

You have requested our views on funeral providers offering discounts only to clients who

purchase a package of funeral goods and services that includes a casket. You specifically ask

whether such packages may discount the basic services fee that covers the services of the funeral

director and staff, and may include the funeral provider’s overhead. 

As your inquiry notes, staff stated its view in Opinion 97-3 that the basic services fee

may not be discounted.1 We have considered the arguments of the National Funeral Directors

Association (“NFDA”) challenging this staff opinion, and find no reason to alter this longstanding interpretation of the Funeral Rule (“Rule”) for the reasons which follow.

First, contrary to the NFDA’s contention, the Commission’s confirmation last year at the

conclusion of its rule review that the Rule should be retained without proposing any of the

amendments sought by interested parties does not compel a different result.2

 In particular, the

Commission’s decision not to propose an amendment to the Rule that would regulate the offer of

discount funeral packages was based in large part on “insufficient evidence to show a prevalent

practice of funeral providers offering discount packages in a manner that unfairly interferes with

consumers’ ability to provide their own caskets.”3

 In retaining the Rule, the Commission simply

preserved the status quo, and did nothing to alter prior Rule interpretations. In fact, the

Commission not only cited, but expressly approved Opinion 97-3, noting that “funeral homes
Pamela D. Griebel

Page 2 of 4

4 Id. at n.93 (emphasis added).

5 Final Staff Recommendations on the Mandatory Review (May 28, 1991). 

6 Id. at 39 (emphasis added).

7 See Pa. Funeral Dir.s Ass’n v. FTC, 41 F.3d 81, 89 (3d. Cir. 1994) (noting that

funeral providers can assure that consumers who buy third party caskets pay their fair share of

the provider’s overhead costs by recouping those costs in the basic services fee that “they are

permitted to charge everyone,” rather than in a casket handling fee).

8 16 C.F.R. § 453.2(b)(4)(iii)(C)(1). If the basic services fee is non-declinable, the

rule also requires a disclosure at the beginning of the GPL that “any funeral arrangement you

select will include a charge for our basic services.” 16 C.F.R. § 453.4(b)(2)(i)(A).

may encourage consumers to purchase a casket from their organization by offering discounts on

services or items except for a non-declinable Basic Services Fee.’’4

Second, a close reading of the precedent on which NFDA relies does not support a

different conclusion. In its report recommending the 1994 Rule amendments,5 staff did not state

or imply that the Rule permits funeral providers to discount the basic services fee in addition to

other fees for goods and services that the Rule requires or permits to be itemized in the GPL, as

NFDA contends. On the contrary, the report contemplated that funeral providers could discount

only fees for “the itemized charges required by the Rule.”6 Similarly, the Third Circuit’s

decision upholding the 1994 Rule amendment banning casket handling fees presumes that the

basic services fee will be the same for all of a funeral provider’s clients, and that only the fees

for products and services itemized on the GPL may be discounted.7

Third, although not contesting the conclusion in Opinion 97-3 that funeral providers may

not discount only the basic service fee, NFDA contends that the opinion does not cite any basis

for its determination that when the basic services fee is combined with the fees for other funeral

goods and services in a discount package, it also may not be discounted. While we think that

Opinion 97-3 provided a clear basis for that conclusion, some elaboration may be helpful.

The basic services fee provisions of the Rule make it clear that this fee is to be the same

for each of a funeral provider’s clients. Each client must receive a GPL, and unless the basic

services fee is included in the price of the funeral provider’s caskets or is declinable, the GPL

must include the following statement: “This fee for our basic services will be added to the total

cost of the funeral arrangements you select. (This fee is already included in our charges for

direct cremations, immediate burials, and forwarding and receiving remains.)”8

 Likewise, if the

basic services fee is included in the price of a funeral provider’s caskets, the GPL must include a

similar statement indicating that all of the provider’s clients must pay the same fee: “Please note

that a fee of (specify dollar amount) for the use of our basic services is included in the price of

our caskets. This same fee shall be added to the total cost of your funeral arrangements if you
Pamela D. Griebel

Page 3 of 4

9 16 C.F.R. § 453.2(b)(4)(iii)(C)(2) (emphasis added). 

10 The rule does permit a funeral provider, in limited situations, to provide to

members of specified groups (e.g., children and infants, memorial society members) a separate,

complete GPL that may contain fees that are less than those listed in the GPL it provides to

consumers who are not members of such a group. Complying with the Funeral Rule, FTC (June

2004) p. 13, available at http://www.ftc.gov/bcp/edu/pubs/business/adv/bus05.pdf.

11 Staff Opinion 07-2 (March 21, 2007), p. 2.

12 16 C.F.R. § 453.2(p) (emphasis added).

13 16 C.F.R. § 453.2(b)(4)(iii)(C)(1) and (C)(2),

14 16 C.F.R. § 453.4(b)(1)(ii).

provide the casket.”9

 Thus, the Rule requires that all of a funeral provider’s clients pay the same

basic services fee that is disclosed in its GPL. 

Because the basic services fee disclosed in a funeral provider’s GPL must be the same for

all its clients, this fee may not be discounted.10 The Rule’s definition of “services of funeral

director and staff,” or basic services fee, provides additional support for this conclusion. As we

have noted in a prior opinion,11 the definition limits the services that may be included in this fee

to those “that are furnished by a funeral provider in arranging any funeral,” and may not include

services “included in prices of other categories in § 453.2(b)(4) [i.e., itemized services required

or permitted to be disclosed in the GPL].”12 Likewise, it is only “unallocated funeral provider

overhead” – i.e., overhead not attributable to the itemized services required or permitted to be

disclosed in the GPL – that the Rule permits funeral providers to include in the basic services

fee.13

Thus, if the basic services fee could be discounted as part of a discount funeral package, a

funeral provider’s clients would not bear an equal share of the costs common to “any” funeral, as

the Rule plainly requires. Moreover, if such a discount package were made available only to

clients who purchase a casket from the funeral provider, clients who elect to purchase a casket

from a third party and are not eligible to receive the discount package would pay a higher basic

services fee than everyone else. The difference between such a discounted basic services fee

paid by clients who purchase a casket from the funeral provider, when subtracted from the full

basic services fee paid by those who purchase a casket from a third party, can only be regarded

as an indirect casket handling fee. Casket handling fees, whether direct or indirect, are expressly

prohibited by the Rule.14 

Fourth, contrary to NFDA’s apparent impression, Opinion 97-3 is not inconsistent with

the Commission’s position, when it adopted the amendment banning casket handling fees, that

the Rule permits a funeral provider to offer discount funeral packages that are available only to

clients who purchase one of its caskets. As the Third Circuit noted, “the FTC distinguishes
Pamela D. Griebel

Page 4 of 4

15 41 F.3d at 90 (emphasis in original).

16 73 Fed. Reg. at 13748 & n.93 (noting that “[t]o the extent consumers wish to

purchase a combination of the goods and services a funeral provider offers, bundling of discount

packages likely confers benefits,” and citing staff opinion 97-3 with approval for its statement

that ‘‘funeral homes may encourage consumers to purchase a casket from their organization by

offering discounts on services or items except for a non-declinable Basic Services Fee.’’).

17 See 16 C.F.R. § 453.6.

direct casket handling fees from offering discounts to people who buy caskets from the funeral

home,” because “[t]he former is an anti-competitive penalty (the fee) and the latter is . . . .a

[pro-competitive] way to encourage consumers to buy their caskets from funeral homes.”15

Since that time, the Commission has stated consistently that the Rule permits discount packages

conditioned on the purchase of a casket from the funeral provider, provided that the basic

services fee is not discounted, because of the pro-competitive benefits such packages provide.16

To comply with the Funeral Rule, a funeral provider must include its full basic services

fee in the price of any discount funeral package offered, and discount only the prices itemized in

its GPL for the goods or services that are included in the package. Although nothing in the

record retention provision of the Rule requires funeral providers to create or retain a record of

what is discounted in their discount packages,17 neither does the Rule prevent providers from

maintaining such records, if they wish, in order to protect themselves from any suggestion that

they are improperly discounting the basic services fee. Funeral providers could also discourage

any such claim by including in the description of their discount funeral packages a truthful

statement that the price of their packages includes the full basic services fee.

The views expressed in this letter are those of the FTC staff. They have not been

reviewed, approved, or adopted by the Commission, and they are not binding on the Commission

or any individual Commissioner. However, they do reflect the views of FTC staff charged with

enforcement of the Funeral Rule. Staff Funeral Rule opinions are routinely posted on the FTC

website at http://www.ftc.gov/bcp/conline/edcams/funerals/staffopinions.shtm. 

Sincerely,

 /s/

Craig Tregillus

Funeral Rule Coordinator