The Death Care Industry: A Review of Regulatory and Consumer Issues

Although virtually every person in the United States will purchase or consume a funeral-related product or service, relatively little is understood about the processes a consumer undertakes in making these expensive decisions in stressful circumstances. Regulation of the industry has been contentious from the outset, and there have been numerous questions as to regulatory effectiveness. This article outlines and discusses issues related to the death care industry with particular attention to consumer interests. ********** Nearly every person in the United States will purchase or consume a funeral-related product or service for themselves or on behalf of someone else. There were approximately 2.4 million deaths in 2003 in the United States, and by 2040, it is projected that this number will nearly double as members of the Baby Boom generation begin to die (National Center for Health Statistics 2006). Funerals are among the most expensive purchases many consumers will ever make (Federal Trade Commission [FTC] 2000a). Most often, a consumer goes through the decision making for this complex, expensive process once, so that there is little experience, and often few sources of information are used (FTC 2000a). Those making funeral decisions may be under time pressure and significant emotional duress, so that they may be considered vulnerable (Gentry et al. 1995). As a result of this, the funeral industry is regulated at the state and federal levels. The purpose of this article is to present a review of consumer protection and regulatory issues related to the death care industry. First, we provide a brief description of the products and services that have come to compose the "death care industry." In part because of changes in consumer preferences and in part because of regulation, there are more choices available to consumers. At the same time, this diversification of the industry has led to its own set of problems, including disparities in regulation and enforcement. Next, we discuss the development of the industry in the United States, including the emergence of consumer activism and government regulation. Although funeral homes were not regulated at the federal level until 1984, the consumer issues of cost and the need for consumer protection have been recognized since the birth of the industry. We then discuss the specifics of federal regulation and the challenges of its implementation. Finally, we provide a discussion of consumer issues and offer insight from consumer research literatures that might help in examining the effectiveness of regulation as well as provide direction for research. Evaluative research that attempts to determine the extent to which the impact of the death care regulation has had on consumers would be instrumental in providing additional direction for policy. BACKGROUND The death care industry generates over $25 billion in sales annually (Mooney 2002). There are about 22,000 businesses in the United States that perform funeral services (U.S. Census Bureau 2004). The average cost of a funeral is over $8,500 (National Funeral Directors Association [NFDA] 2005), although funeral and burial costs combined may reach $10,000 (AARP 2004). Consumer preferences, competition, and technology have continued to drive changes in this industry. To better understand the consumer protection issues surrounding the death care industry, it is useful first to define what composes the "industry." The death care industry can be divided into five primary components (General Accounting Office [GAO] 2003): (1) funeral homes, (2) crematories, (3) cemeteries, (4) preneed sales of funeral plans, and (5) third-party sales of funeral goods. What has historically been a fragmented group of discrete product or service providers has ultimately become a group of businesses that often compete with one another by offering the same products or services but operate under different sets of regulations at the state and federal levels. …