This is part two of Preying on Grief, Crikey’s four-part investigation of the funeral industry. Read part one here.
The funeral industry is a massive money-making machine. Industry revenue was projected to hit $1.6 billion in 2020-21 with Australia’s ageing population fuelling that figure. The number of Australians aged 85 and over is expected to double to more than 1 million by 2042.
Many grieving families faced with the stigma of being seen to skimp on loved ones’ funerals are unaware of their choices for saying goodbye, with funeral companies pushing back against initiatives to improve price transparency.
Grief on a pamphlet
When Sandra van der Laan’s sister died unexpectedly in 2014, van der Laan rang two funeral providers and got similar quotes of about $6000 for a funeral and cremation package. But when she tried to delve into how the costs were calculated, one funeral home refused to provide a breakdown, while the other worked with her to reduce costs.
“We ended up getting a much cheaper funeral, and if I knew what I know now it would have been cheaper,” she told Crikey.
Van der Laan, a professor of accounting at Sydney University, later conducted a study into costs in Australia’s funeral industry.
There are four aspects to a funeral: disposing of the body; the ceremony; memorialisation, such as a tombstone; and planning and paying for the funeral.
Disposing of the body is the only thing a family legally has to arrange — but funeral providers often present an expensive package combining all the other aspects as a necessity.
“People don’t understand their choices,” van der Laan said. “They’re grieving, they’re vulnerable, and they get handed a pamphlet [by the hospital] that says, ring your local funeral director … and then you end up buying a package because that’s what funeral directors sell.”
More than half of all Australians die in a hospital — just 14% die at home — and hospitals generally require bodies to be removed within 48 hours.
Asking questions while grieving is tough, and not something many families do because of taboo and stigma — few want to be seen as skimping on a funeral.
“It’s perceived as being unfriendly when you ask questions about price around someone’s funeral,” said van der Laan. “You’ve got to remember the people on the end of the phone or even the people that come out to your house to help you arrange your funeral, they are sales people.”
Upselling every aspect
This stigma is exactly what many funeral homes rely on to peddle expensive services.
The funeral industry has an average profit margin of 15%. Nearly a quarter of that comes from professional service fees (with some studies finding fees made up 39% of costs) which include running ceremonies, transporting bodies and preparing them for viewing. It doesn’t include the more expensive aspects of cremation, burial or medical certification.
Funeral providers charge widely different amounts. In 2019 the consumer advocacy group CHOICE found the cost of a direct cremation with no ceremony ranged from $1200 to $5600 in 2019. Prices for viewing the body ranged from $110 to $1600.
Coffins also have a high mark-up, some as high as 200%. Coffins sell at Costco for $899 but a similar standard coffin will sell at a funeral home for $2000. Some providers charge a fee for families who want to bring their own. Coffins can be made from cardboard, but few funeral homes offer this option.
When Colin Wong’s grandfather died in 2014, Wong attempted to book a funeral director — but none agreed to give him an upfront quote, insisting instead to run through his options in person.
“It was highly emotional and you can’t do that another two, three, four times to get more quotes,” he told Crikey.
So in 2017 he established funeral pricing comparison site Gathered Here, calling different companies for quotes and listing them on the site.
“That created a bit of a stir,” he said. “We had a number of legal threats and a number of non-legal threats.”
Funeral directors threatened injunction orders and ordered him to remove their prices from the website, but eventually they backed down after Wong received pro-bono legal help. In the years since, many states have made it mandatory for funeral companies to provide information about itemised costs and services.
Imbalance of power
While price transparency is a start, there’s still a big power dynamic between funeral directors and grieving families, Dr Hannah Gould of Melbourne University’s DeathTech Research Team tells Crikey.
“Many have a basic fee package you can find on their website and then they’ll often convince you, for better or for worse, that you really do need this better package,” she said.
“It’s like the second cheapest wine phenomenon. You don’t want to get the cheapest, and it’s even more so for a funeral …”
In NSW, burial plots can be bought permanently or via leases of 25, 50 or 99 years. But an Independent Pricing and Regulatory Tribunal report found just 0.4% of people in 2018-19 chose the leasing option — suggesting very few were offered it.
“There’s a lot of things about like the structure of that purchase interaction that shifts the balance of power away from the consumer,” Gould said.
This power dynamic was abused when selling funeral insurance, the Hayne banking royal commission found. A 2015 Australian Securities and Investments Commission report found premiums spiked once people hit age 50, and many people cancelled their policies as prices increased, leading them to lose out on anything already paid.
In 2014 the number of policies cancelled was 80% of the number of policies sold, with most policies cancelled within a year. Many funeral insurance plans don’t cover all aspects of the funeral — people often pay much more than they receive.
Some agents were found to be targeting Indigenous communities by giving the appearance of being Aboriginal organisations in an effort to sell their products to younger consumers. Regulation has since been updated to improve protection for consumers.
Next: the housing crisis for the dead.
I recall a Sydney crematorium charging a massive fee for those who did not buy a space in their rose garden but elected to dispose of the ashes themselves. A quick change to the regulations by the then Health Minister closed that lurk
I am disguated with funeral organisations and those that funnel qwerky services ontop of funeral services. When I entered the freemason nursing home 5 days before my mother died I found a service pamphlet in her draw regarding dyed birds at a funeral service.
I soon found out this organisation/service came to the dementia nursing home with stuffed dyed birds and took photos of the residents with these birds on their shoulders. I was lead to believe the residents experienced these birds as live birds which they all enjoyed immensely I was told.
A nurse came into the room in my mother’s last days and told me about this smazing day. She pointed to the picture on the dresser with the stuffed pink dove on my mother’s shoulder and said “wasn’t that a great day Margaret” Mum feebly said yes. She was dead four days later. But that is another awful story.
I’ll never accept that the way mum was treated in a freemason home was ok. I’ll never accept that the public hospital supported us in her last days. I’ll never accept that the hospice she was in for her final 3 days did the right thing by her or me.
As for the funeral home – they were nothing short of disgusting when communicating with me. I didnt go to my mum’s funeral. I was too traumatised by the whole last week of her life to attend.
She was an aged care nurse her whole life and held hundreds of hands while they passed over with dignity which she saw as a duty to life lived.
Mum got none of that respect at the freemason home, the hospital, the hospice, or from the funeral service that supported those dyed stuffed birds that they passed of as live to the residents and families.
Take me outback and burn me with dignity on a pire while everyone celebrates my life. I don’t want a coffin or a service in a funeral whatever. Just let my ashes blow wherever. I’ll be more than happy with that.
A couple of years later dad died. I remember how absurd the funeral person’s eulogy was. Not what we asked for. F that.
So much of this has been my experience, including one funeral company attempting to wriggle out of a contract for a memorial service because the deceased had decided to will her body to a university (thus denying a funeral director potential extortionate and unnecessary embalming and related fees…). I strongly recommended reading Jessica Mitford’s “The American Way of Death”, followed by Evelyn Waugh’s “The Loved One”. The “values” of the American death industry of the 1960’s have spread well beyond the USA as local family companies in other nations are bought up by corporations and remaining local companies learn and repeat sales and “service” strategies. Despite best efforts, we were still gouged $180 for a small loose-leaf folder in which attendees signed their names. No wonder these networks of salespersons preying on the bereaved don’t want to share detailed costs up-front.
There’s an assumption that the more a family spends on the deceased’s funeral is proof of how loved & venerated they were. Some lavish funerals are a public show, a flagrant boast of the degree of devotion to the deceased. Our western culture needs to get over this.
It’s not confined to western culture!
Actually talking to funeral directors the trend is those who inherit a substantive estate want the cheapest disposal. It is the families of modest means who want a more fitting farewell – after all funerals are not for the deceased they are for the living.
When our mother died we had no idea of costs, or even the fact that a double burial site meant one on top of the other and we ended up by 2 double burial sites.