Dying for Dollars

As the death-care industry booms and consolidates, Houston's Service Corporation International is leading the way

"We feel we provide exemplary service," said Waltrip. "And we feel we charge a fair price for the exemplary service we provide."

"You always try to show the customer the most expensive casket first," explained Vachael Starks, as she showed me around the casket showroom at the Commonwealth Institute of Funeral Service. A recent graduate of the mortuary school, Starks now works behind the reception desk at the American Funeral Services Museum, which adjoins the school [see "The Mausoleum Museum," page 13]. She explained that students at the school receive full instruction in the pricing and location of caskets. "By showing them the most expensive one first, that's the one they remember."

The most visible part of the funeral business, and usually the most profitable, the casket industry is highly competitive, with 300 U.S. companies producing caskets made of everything from plywood to copper. Local funeral homes quoted prices ranging from $997 to $89,500. "Yes sir, and what is that made out of?" I inquired about the top-end model. "Solid copper with sterling-silver overlay," he replied. (If you're interested, call Settegast-Kopf.)

Call it a casket, coffin, whatever you like, it is no more than a box. Yet the choices available are bewildering: full couch, half couch, fully sprung mattresses, polished, protective, non-protective... And the prices on the caskets don't offer a reliable gauge of their relative value. Even more disconcerting is the realization that funeral homes usually mark up the cost of a casket by 200 to 400 percent.

When I asked members of the funeral industry about the high cost of caskets, I got almost identical responses from two different people: "Merchandising is merchandising," both replied, and: "A Yugo is cheaper than a Rolls-Royce. So why doesn't everybody buy a Yugo?"

But comparing caskets to cars is something of a reach. After all, you use a car every day. You use a casket only once. As for "merchandising" -- buying toothpaste and buying a casket are simply not the same sort of transaction. Certainly, people will shop based on their perceptions -- but they can also seek the lowest price on toothpaste. Once a customer is in a funeral home, though, he will very rarely shop elsewhere. Thus, the pricing of merchandise in a funeral home has very little resemblance to the real world, where Americans have made price comparison a favorite indoor sport.

But there may be relief on the horizon.
Russell Moore, who operates Casket Gallery International -- a retail casket business in the Dallas suburb of Mesquite -- thinks funeral homes charge too much. "Our $895 non-protective casket would compare to an $1,895 or $2,495 casket you'll find in a funeral home," he said. Moore argued that funeral homes try to make their cheapest casket look bad, encouraging customers to buy a more expensive product. Speaking of a Dallas-area funeral home that offers low-cost services, he said, "They have a casket in there that is the ugliest thing in the world. By the time you buy a casket that's attractive, you will have to spend $3,000 to $4,000."

Moore's business prospects are good. Several billion dollars' worth of caskets are sold every year in the U.S. And, by law, funeral homes cannot refuse to use a casket from a third-party supplier such as Casket Gallery. (Last month, the Federal Trade Commission adopted a regulation prohibiting funeral homes from charging a handling fee on caskets purchased elsewhere. The National Funeral Directors Association has notified the FTC that it will appeal the ruling.)

Moore frankly equates the funeral home's control of the casket business with racketeering. Because they control the supply of caskets, he said, funeral homes effectively control the price. "In any area that you have a high percentage of corporate-owned funeral homes, you are going to have higher prices," he said. "And, frankly, that is one of the areas we are targeting." Moore said his company wants to expand into other cities, including Houston, but he would not say when it might happen.

Cemeteries were once the domain of the church. Gradually, the operation of the graveyard passed to the town or city, which operated the cemetery as a public service. Today the cemetery has become yet another area in which crafty entrepreneurs can make handsome profits. SCI owns four cemeteries in Houston. The company's officials say they are the four largest.

"It's hard to get people to buy anything before they need it," explained an SCI saleswoman at Memorial Oaks Cemetery, as she tried to talk a customer into a mausoleum space. Buying a crypt in the mausoleum could be cheaper than a regular grave, she explained, once you include the cost of a vault, grave-liner and headstone.

At Forest Park Westheimer -- another SCI operation -- the cheapest price quoted over the phone for a regular grave was $1,200. Then, surprise! -- the salesman suggested that the mausoleum might be a better deal. "You can save up to 10 percent if you buy a pre-construction mausoleum," he said. He explained that the mausoleum wasn't built yet, but buyers could reserve a new coffin condo for just $3,495. Once the building is completed later this year, the crypts will be selling for $6,995. "We discount when we sell pre-need," he explained.

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