2014-03-12

Balancing the Price

    One thing I have come across is the issue of pricing. This is a big issue for all involved in the funeral industry, from mourners to staff, and one I want to discuss in more detail. So today I'll be looking at the balancing act many funeral home have to perform when it comes to pricing.

    That is, the balance between getting paid enough to operate and not overcharging the deceased and/or mourners.

    A funeral is a sensitive time for most, either in planing their own or planning for others. As such price can be a serious concern for people when planning a funeral, with concerns about not paying too much or too little. This is something which has come up with several funeral staff, from owners/managers to simple arrangers. They've told me about their concern with not 'ripping off' people by charging too much.

     Funerals are surprisingly labour intensive to both organise and to conduct. A lot of work needs to be done for a funeral, from organising and collecting paperwork to booking venues and celebrants or priests. Then there is also the work involving the deceased, from collecting them (which takes at least two staff) to preparing and coffining them. Then on the funeral itself three or more staff spend an average of an 40-60 minutes (not including travel time) to conduct the service.

    So a funeral takes quite a few staff, which is a huge cost. Added to this is the cost of materials, such as gloves, insurance (for staff, premises, and cars), maintenance (of equipment and cars), and more. Overall a funeral service can cost the company quite a lot, even if the service is relatively basic and simple as there are a lot of hidden costs behind the scenes.

    This means that funeral homes have little choice in what they charge to some extent. Their costs are high so the prices must cover the costs to remain in business.

    Another common issue for funeral homes is lack of payment. It's not uncommon for funeral staff to tell me about an instance or two where the funeral was not paid for. The funeral home will provide a funeral service, pay the cost to conduct the service. Then when they ask for payment those responsible decide to dispute the cost and/or simply not pay.

    An example of this was a recent discussion with one conductor, she told me about a large funeral she conducted four years ago. It wasn't a super fancy funeral, but the bill was over $10,000 all up. However, after the funeral the family decided not to pay and had to be taken to court. After almost four years and a court case it has been decided that they will pay the funeral home the full price in small instalments over a few years.

    This is just one example of something I hear relatively often. Where the funeral home pays to conduct the funeral, then is denied payment or the price is disputed. One funeral home owner once described it almost as a betrayal of trust on a personal and professional level. They explained how the funeral home has to trust people off the street, the funeral home puts up thousands of dollars of money with the hope payment will be made. Then the bill is disputed or not paid and so the funeral home is out for thousands of dollars.

    For a company with tight profit margins this can be quite a blow and risk the financial security of the business.

    So for a funeral home setting the price isn't necessarily a simple thing. They have to charge enough to make a profit and survive. Added to this is the ever present risk of a disputed payment, or a non-payment. Yet at the same time funeral staff are often conscious of the high cost for mourners and the deceased.

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5 comments:

  1. Wow, $10,000+ for a funeral? I had no idea. I've only been to one before, but the family/community helped out a lot, so I can't imagine it being that pricey. I thought it was interesting that you said that the funeral home has to invest a lot in their customers before payment. Is there always this huge monetary risk for funeral homes? Edith | http://www.elysianfieldsfunerals.com.au/venues/gold_coast/3/54

    ReplyDelete
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  4. Anonymous15/3/17 22:10

    How's it different for any other service provider? Ask for a desposit if you want surety

    ReplyDelete

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