Opinion 97-5

432-
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D. C. 20580
Division of Marketing Practices
Laurie Meehan
Attorney
Direct Dial
202-326- 3755
April 16 , 1997
David Nixon
Funeral Management Service, Inc,
O. Box 13320
Springfield, Ilinois 62791-3320
Dear Mr. Nixon:
1 apologize for the delay in responding to your inquiry. You have raised several issues
with respect fueral homes granting discounts to consumers in the course of offering to sell and
selling funeral goods and services. As we discussed in our last conversation, if discounts are
granted as a matter of course to consumers, these discounts should, instead, be the actual prices
and included as such on the General Price List. As the FTC publication Complying with the
Funeral Rule states
The itemized prices on your General Price List, as well as your
Casket Price List and Outer Burial Container Price List
should be accurate and up-to-date. These prices should reflect
the prices that you actually charge your customers.
Accordingly, as a general practice, if the cost of any item is discounted for all consumers, the
discounted prices should be listed as the actual price.
In your letter, you propose four scenarios with respect to discounting services on the basis
of whether or not a consumer purchases a casket trom the fueral home. As a general matter, I
must reiterate that the Funeral Rule prohibits charging casket handling fees pursuant to Section
453.4(b)(1)(ii) ofthe Funeral Rule. The scenarios you proposed are addressed as follows:

1. A fueral director offers families a discounted price for
his/her Basic Services of Funeral Director & Stafffee, if the family
purchases a casket ftom his/her fueral business. Families
supplying their own casket are not offered this discount. Is this
allowed under the FTC Funeral Rule.
This practice is impermissible under the Funeral Rule. Funeral homes may charge a non-
declinable Basic Services Fee as a condition for the purchase of other goods and services. When
this fee is included in the price of a casket, the rule requires fueral homes to disclose to
consumers that the " same fee shall be added to the total cost of your fueral arangements if you
provide the casket." Section 453. 2(b)(4)(C)(2). A discounted fee for consumers who purchase
the casket ftom the fueral home would be inconsistent with this section of the rule stating that
consumers who do not purchase a casket ftom the funeral home would have the same fee added
to their arangement. In addition, this discount would, in effect, become a fee assessed to only
those consumers who do not purchase a casket ftom the fueral home, and would equate to a
casket handling fee. Accordingly, this proposal is inconsistent with Section 453.2(b)(4)(C)(2)
and is potentially violative of Section 453.4(b )(1 )(ii).
2. A funeral director offers families a discounted price for all
his/her service fees (Basic Services of Funeral Director & Staff
Embalming, Other Preparation of the Body, etc.), if the family
purchases a casket ftom his/her funeral business. Families
supplying their own caskets are not offered this discount. Is this
allowed under the FTC Funeral Rule.
Again, this scenario is not allowable under the Funeral Rule. The same issues arise with
respect to scenario number one. First, if the Basic Services fee was included in the price ofthe
casket, the required disclosure concerning the " same" fee as mentioned above would be
inconsistent with the fueral home s practice of assessing a "different" fee to consumers
providing their own caskets. Second, discounting fees on the basis of the purchase of a casket
has the effect of charging fees to those consumers who do not purchase caskets ftom the funeral
home. Consistent with previous staff opinions on this subject, fueral homes are permitted to
offer fueral packages which offer a discount to all consumers. Strcturing discounts to
explicitly burden consumers who purchase a casket outside of the fueral home or discourage
consumers ftom purchasing a casket from outside the funeral home, while benefitting only those
consumers who purchase a casket ftom the fueral home effectively amounts to a casket
handling fee that is prohibited by the Funeral Rule.
3. A fueral director offers families a discounted price for all
his/her service fees (except the Basic Services of Funeral Director
& Staff), if the family purchases a casket ftom his/her fueral
business. Families supplying their own casket are not offered this

discount. Is this allowed under the FTC Funeral Rule.
This is allowable under the FTC Funeral Rule. Although we are certainly concerned
about the premise of a proposed discount when it is structued in a way to monetarly burden
consumers who supply their own casket or discourage consumers ftom supplying their own
casket, fueral homes may encourage consumers to purchase a casket ftom their organization by
offering discounts on services or items except for a non-declinable Basic Services Fee.
4. Allowing that a fueral director is permitted to offer a
discounted price in one of the thee prior examples, I believe that
he/she can enter either the itemized prices on the Statement of
Funeral Goods & Services Selected or a single package total price
with a check mark on all the service items included in that package
pnce.
If a fueral home offers a package of goods and services that complies with the Funeral
Rule, it may list the goods and services included in the package together with the package price.
See Complying with the Funeral Rule, page 24.
1 hope that you find this information helpful. Please note that the views expressed in this
letter are those of staff only. The have not been reviewed, approved or adopted by the
Commission, and they are not binding on the Commission, They do, however, reflect the
opinions of the staff charged with enforcement of the Funeral Rule.
Sincerely,
Laurie Meehan
Funeral Rule Enforcement Staff