Please accept these comments regarding restrictive practices on Internet casket sales on behalf of the California Casket Retailers Association (CCRA). The CCRA members are composed of third party providers of caskets and other funeral goods as well as suppliers and distributors.
We know that the intent of the Funeral Rule
was and continues to be to promote competition in the supply of funeral
goods, particularly caskets, to the consumer, so as to allow unfettered
choice, to the consumers' benefit. We are encouraged by the Amicus brief
recently filed by the FTC, where this
The prohibition against "handling fees" in 1994 was the teeth in the Funeral Rule that allowed third party providers to enter the market and survive. The anticompetitive practice of imposing "handling fees" ensued as a means for funeral establishments to circumvent the intent of the Funeral Rule and to eliminate the emerging competition; competition that was a major threat to the virtual monopoly enjoyed by the cartel of funeral directors.
We view the advent of Internet providers as an additional means of distribution benefiting the consumer. We further view the practice of"Bundling" as an unfair trade practice that is in violation of the existing Funeral Rule. All of the upcoming discussions regarding Internet sales and the tactics used to discourage families from seeking third party sources will be irrelevant and any safeguards designed out of these hearings will be easily circumvented by funeral establishments utilizing the practice of "Bundling." This is where discounts in the hundreds, even thousands, of dollars are given only to those families that purchase the casket from the funeral establishment doing the services. The discounted package prices, in effect, become the DE-facto prices of the funeral home. Therefore, the families that do exercise their right to purchase a casket from another source, are not eligible for the discount, and end up paying more for the exact same services that others receive.
When this practice was brought to the attention of the California Department of Consumer affairs in 1977,Their reply (which took 6 months) was that this was not in their jurisdiction and that we should look to the FTC. We have been looking to the FTC since then. This was discussed in Nov. of 1999 at the FTC roundtable. The inaction by the FTC has sent a message to the existing funeral establishment that this practice can continue. Our organization's attempts on both the California State legislative and litigative fronts have failed. The ability of third party providers to continue to provide consumers with greater choice and with real savings, via sales through the Internet or through brick and mortar stores, will inevitably all but disappear unless consumers are protected against paying higher fees for the same services.
THIS NEEDS TO BE SPECIFICALLY ADDRESSED BY THE FTC.
We suggest that the FTC also consider the following consumer safeguards:
The tactic of "meeting any price" by funeral establishments flies in the face of the purpose of the Casket Price List and GPL. Why don't funeral establishments offer all customers their best price in the beginning, as opposed to lowering their prices to only those that do some shopping? We are not opposed to discounts. In fact, funeral homes should just lower their casket prices and charge appropriately for their services. Internet providers and casket retailers typically work on retail prices that are double their costs or are based on their costs plus $500. Funeral establishments would like to maintain their higher profit margins, to the detriment of the family that seeks alternatives. The cartel of thousands of funeral establishments, with such a substantial percentage controlled by the SCI, Stewart, Leowen and other consolidators, are acting so as to eliminate the consumers' potential savings that could be realized by seeking alternative sources of goods.
In addition, the top casket manufacturers, Batesville, York and Aurora (whose combined market share is well over 50%) all refuse to sell to any entity other than a funeral establishment. This restrictive trade practice actually further limits the consumer's ability to benefit from competitive pricing, since any Internet seller not owned by a funeral establishment is severely impeded as to distribution capabilities and by price, since an intermediary is required to access these primary sources of caskets.
We truly appreciate the opportunity to submit our views on this subject and would sincerely appreciate the opportunity to be heard as a panelist in future FTC hearings related to our industry.