Funeral Industry News

Bargaining at The Funeral Home…Becoming More Common

March 1, 2011

Bargaining at The Funeral Home…Becoming More Common

imageThe tough economy is forcing people to look for final farewell bargains, even when it comes to dealing with the dead.

The phone will always ring at the funeral home.

That’s as sure as death itself.

But in these austere times, it might be a different kind of call.

“We get price shoppers that call in here,” said Sammy Oakey, president of Oakey’s Funeral Service and Crematory in Roanoke.

People are looking for bargains, even when it comes to dealing with the dead.

“Just about everybody’s looking for less expensive ways to take care of things,” said Wayne Lovelace, funeral director at Lotz Funeral Home in Roanoke.

“Before all this happened, loyalty played a big part in it,” he said.

Loyalty chose your funeral home, and the wishes of the dead or your own emotional desire to honor them set the arrangements.

“There’s a lot of money thrown away in the funeral business because of the emotions involved,” said Buck Simmons, owner of Valley Funeral Service in Roanoke. “If I don’t spend money, it don’t look like I love them.”

But the tough economy is forcing a practicality into those decisions, and pushing the emotions out. Cremations, which can cost thousands less than a burial, are up. Consumers are trimming frills, from limiting visitations to choosing less-showy caskets.

And lately, players in the affordable-funerals business, who offer burials and cremations with lower overhead and on thinner profit margins, have found foothold in the Roanoke market.

You can’t take your money with you, but if you die in this economy, chances are your loved ones will look for a way to spend less of what you leave behind on your final farewell.

Trend toward cremation

In 1977, just three out of every hundred patrons of Oakey’s Funeral Service opted for cremation. In 2010, three out of every 10 Oakey’s clients took that route.

The trend toward cremation is an old one, but it’s been accelerated by the recent recession, funeral directors all over the Roanoke Valley say.

While Oakey’s cremation rate has climbed steadily for decades at 1 percent or 2 percent a year, between 2009 and 2010 — the heart of the recession — the rate jumped by 5 percent.

“Economics are a big part of the cremation,” said Oakey, whose company, with five locations, is the largest funeral provider in the Roanoke Valley. You can easily spend $8,000 to $10,000 on a burial at Oakey’s if you want, or cremate for about $2,000.

“Too many people have had to go with the option of cremating; if the economy had been better, they’d have chosen a burial,” said Windy Bishop, office manager of Valley Funeral Service.

“Cremation is something a family should want to do, not have to do,” Simmons said.

Even with the economy, Virginians haven’t embraced cremation like others. The state’s cremation rate of 31 percent ranked it 33rd out of the 50 states and Washington, D.C., and well below the national rate of 37 percent, according to 2009 data from the Cremation Association of North America. Nevada’s rate was the highest at 72 percent, while Mississippi’s was lowest, at 12 percent.

But values regarding cremation are changing, and tough economic times may be forcing the issue.

“Traditionally, in the black community, cremation was like the last choice for them,” said Connie Steele of Roanoke’s Serenity Funeral Home and Cremation Service. But lately, “I’ve seen a lot more of our folks going toward cremation.”

Duke Curtis of Hamlar-Curtis Funeral Home agreed.

Funeral homes are responding to customers’ desire to save money on cremation but still have a traditional funeral with a viewing.

At Lotz’s three locations, they call it a “traditional cremation,” Lovelace said. The family can rent a casket for a viewing or service with the body present before the cremation occurs.

Cemeteries are responding to the increase in cremation as well. People still want a place to visit their loved ones, so Evergreen Burial Park, Fair View Cemetery and Cedar Lawn Memorial Park are among those in the Roanoke area that offer columbariums and niches for storing cremated remains, or “cremains.”

Those choices can mean significant savings over a traditional burial.

At Evergreen, a burial with a plot, vault and marker will run you $4,000. But you can bury cremains in a plot for less than $2,500, said general manager Don Wilson. And a niche in which to store cremains, including an engraved marker, comes in at $1,300.

“It gives you an emotional connection when you’ve got a place to go,” Wilson said.

Ways to trim costs

Even those who opt for full services want to trim costs.

Oakey said customers are looking for less expensive caskets, such those made of metal or wood veneer, over solid wooden ones.

“We saw that coming,” Curtis said. About a year ago, he moved out high-end caskets and replaced them with more moderately priced ones to help keep down the cost of the average funeral.

“People are still looking for a nice service,” he said, but they’re scaling back.

More often, they’ll condense the pomp and circumstance to a single day. Instead of having two visitation times, they’ll have one.

“It’s becoming pretty common to combine the visitation with the service,” said Lovelace, at Lotz. “That way they don’t have to pay for use of the facilities for two times.”

At Valley Funeral, Bishop said they try to “nip and tuck” to stay within a family’s means.

And those means are often limited not only by the economy, but, in increasing cases, by having an elderly person die in a nursing home having already depleted all of their money.

Bishop said the funeral home has agreed to store a body for several days to allow family members to hunt for money to pay for a funeral.

Tom Meritt, director of Family Choice Funeral Home in Roanoke, said he’s seeing more people go with no ceremony at all. People will ask him to cremate a body and mail the remains when he’s done. Some ask for a burial with no ceremony.

” ‘Let us know when it’s done,’ ” Meritt said people will tell him. ” ‘We’ll go up to the cemetery.’ “

At the same time, funeral homes are trying to find ways to add value and services. Oakey’s is doing some post-funeral receptions in its facilities, hiring caterers to handle the food and drink. Later this year, Oakey said, the funeral home will offer to broadcast a live video feed of funerals on the Internet.

“We’re not just a funeral home anymore, we’re event planners,” he said.

The average cost of a funeral in the United States increased by 27 percent between 2000 and 2010, according to the National Funeral Directors Association, from $5,180 to $6,560. The price doesn’t include a vault, plot or marker.

Those rising prices have opened the door for funeral homes that thrive on under-selling their established competitors.

Affordable-funerals business

The Roanoke area got its first successful entrant in the affordable funerals market 12 years ago, when Valley Funeral opened.

“We were ahead of our time, so much so that people didn’t grasp it at the time,” said Simmons, Valley Funeral’s owner.

A few other less expensive funeral homes opened and closed in the interim, but Valley Funeral pretty much had the affordable end of the market to itself until Family Choice opened a year ago.

Lately, they’ve been in a bit of a war, though Meritt admits Valley Funeral’s prices are lower.

“He’s making me advertise,” Simmons said.

Both Valley Funeral and Family Choice operate on a similar business model.

Both say they offer everything Oakey’s or Lotz offers, but from re-purposed commercial buildings. Valley Funeral is in a former pancake house on Peters Creek Road, while the Family Choice building used to house a bank branch at Valley View Mall. They don’t have large display rooms for caskets or big sanctuaries for services. Meritt displays urns in the old bank vault.

Valley Funeral has four employees, including a funeral director who does embalming on-site. At Family Choice, Meritt is the funeral director, assisted by an apprentice and two young men who work on call.

Family Choice has no hearses or limousines, just a van, though Meritt will rent a hearse if a family wants one for a procession.

Oakey admitted he’s lost a little market share as new players have come on the scene.

Simmons isn’t happy about having to advertise, because it adds to his overhead. He’s looking for ways to make his business stand out, such as offering the use of a 19th-century horse-drawn hearse he’s restoring, or a motorcycle hearse.

In the end, though, he thinks everybody in the funeral business will be fine.

The customers, after all, will necessarily keep on coming.

“The truth is, there’s enough business for everybody,” he said.

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