Funeral homes finding subtle ways to cut costs
McClatchy Newspapers (MCT) - About two weeks ago, the grass outside one South Florida business had become too brown to bear. So Riverside Memorial Chapel office manager George Camargo put in fresh sod himself, saving somewhere between $500 and $1,000 in labor costs.
"It doesn't matter what type of business you're in. Everybody is facing the same crisis," said Ralph, of T.M. Ralph Funeral Homes in South Florida.
A new survey by the National Funeral Directors Association shows that funeral home revenue is weakening as more consumers opt for cremations, less expensive coffins and wakes, and shorter viewing periods. And the trusts and stock funds funeral homes use to invest money from prepaid clients are suffering.
Other than cutting costs, funeral homes have few choices, said fourth-generation funeral director Jim Mumaw of Mumaw Funeral Home in Lancaster, Calif.
"Our profession's different from a lot of retail professions," he said. "When things get slow you can't go out and have a sidewalk sale to bring people in."
Although gas prices have receded from their spike last year, T.M. Ralph is making sure vehicles take the most economical routes and errands are grouped together.
Between delivering death certificates to doctors, collecting bodies, visiting health departments and funeral processions, fuel can end up being one of a funeral home's biggest expenses, Ralph said.
"Those couple pennies a gallon in the grand scheme of things add up," she said.
The key, of course, is to make changes that are imperceptible to customers, many of whom are faced with making major financial decisions at an already difficult time.
Total U.S. funeral costs averaged $7,323 in 2006, the latest figures available from the association, not including cemetery and monument costs.
New hearses often are the first cutback. They cost about $80,000, the association said. The trade-in market for hearses is small and they are not fuel-efficient.
Sheets and towels used to move bodies are more likely to be laundered in-house, the new informal survey says.
Sheet metal urns are outselling copper and bronze ones. Mahogany-stained coffins are replacing solid mahogany caskets.
At Riverside, all lawn-care service has been discontinued, and employees clean the offices on their own, too, Camargo said. At Fred Hunter's Funeral Homes in Hollywood, Fla., light bulbs in offices and other areas _ except where visitations take place _ have been switched to compact fluorescent bulbs. That should save on energy costs in the long run, said Mark Van Rees, director of funeral home operations.
Likewise, only the employees at Caballero Rivero Woodlawn in Coral Gables, Fla., are feeling the effects of the economy, said funeral director Aimee Bedenbaugh. "We don't want to reduce the service to the families," she said.
Overtime for employees has been cut sharply, and the coffee service for workers now comes with less-expensive brew.
The business is even trying to accommodate people who are having trouble making monthly payments toward prepaid arrangements.
"Some people aren't able to make their payments," Bedenbaugh said. "We're letting them put them on hold for a month or two."
For customers whose loved ones didn't already plan their farewells, despite their grief, clients are shopping around. "Fifty dollars can mean the difference between whether you get the call or don't get the call," said Jack Hagin, director and owner of Brooks Cremation and Funeral Service in Fort Lauderdale.
Cut-rate caskets are also easier to come by since the Costco warehouse chain started selling them in 2004, further slicing into funeral home profits. Federal Trade Commission rules forbid funeral home operators from charging a fee for caskets bought elsewhere.
Although consumers are watching their wallets, third-party caskets aren't a huge problem for funeral homes, said Mark Musgrove, past president of the National Funeral Directors Association. He runs several funeral homes and cemeteries in Oregon.
"Anytime a family selects a service or merchandise we are accustomed to providing, it does affect our bottom line," Musgrove said, but "not every area has a Costco."
Another way the bereaved are saving money: cremations. More than half the people who died in Florida in 2007 were cremated, the association said.
One factor may be the cost of cemetery plots. Their value rose with the real estate bubble but haven't declined as property values have fallen, said Dennis Werner, a spokesman for the Cremation Association of North America. He expects cremations to rise significantly this year, based on conversations with funeral directors.
At a funeral with cremation, families only need to rent a casket, rather than buy one, saving thousands of dollars. They don't have to buy a vault or liner for the cemetery, nor do they need a cemetery plot.
"You can get a funeral with a cremation for $2,200," Hagin said. "For those who say that's still too much, we have direct cremation for $795."
Funeral home operators said some families have no choice but to consider value over everything else.
"We hear people all the time say my father died _ and I lost my job," said David Lowery, president of Panciera Funeral Homes in Pembroke Pines. "I heard that several times last month."
McClatchy Newspapers reporter David Coffey contributed to this article.
© 2009, The Miami Herald.
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