SIC 7261 Funeral Service and Crematories

 
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SIC 7261

This classification includes establishments primarily engaged in preparing the dead for burial, conducting funerals, and cremating the dead.

NAICS CODE(S)

812210

Funeral Homes

812220

Cemeteries and Crematories

INDUSTRY SNAPSHOT

The U.S. Bureau of Census projects deaths to increase at the approximate rate of 1 percent per year to 2010. Gains in industry revenue have slowed, with some stock prices dropping, despite continued consolidation by corporations and improved business practices by independent funeral homes. The steady rise in the cremation rate, as well as a trend toward personalization, continues to influence the industry to find creative ways to market its services.

ORGANIZATION AND STRUCTURE

More than 22,000 funeral homes exist in the United States. Of this number, almost 87 percent are family owned and operated. Funeral homes in the United States average 47 years in business; however, it is not uncommon to find firms that have been in operation for 100 years or more.

Since intervention and subsequent regulation by the Federal Trade Commission (FTC) in 1984, there have been major shifts in the way that funeral homes deal with the general public. Consumers are no longer kept in the dark concerning funeral cost. The FTC requires all funeral homes in the United States to provide consumers with a copy of their general price list upon request, so it is possible for the consumer to make cost comparisons for like services among competitors. The price list includes the various services that the funeral home provides, a description of those services, and the cost of each individual service. By presenting these items in an itemized fashion, the consumer may select and pay for only those services desired. Prior to the FTC ruling, it was common practice among funeral homes to use unit pricing. The cost shown on the casket selected generally included all the services requested by the consumer. Most funeral homes, however, did not allow for reductions in services.

The general price list, although possibly the most important consumer tool, is not the only requirement that directly affected the funeral purchaser. Telephone disclosure of prices is also required, as well as disclosures concerning local laws and cemetery regulations concerning the practice of embalming and cemetery merchandise.

BACKGROUND AND DEVELOPMENT

The practice of preparing the dead for burial has been recorded throughout human history, with the ancient Egyptians as the most famous example. Funeral services, as they are known in the United States today, originated in the late nineteenth century. Prior to that time, responsibility for the burial of the dead was assumed by the family of the deceased. The preparation and viewing of the body was usually done at home, a practice that continued into the 1960s. Funeral services were generally held in the community church with the burial following in a grave prepared by friends and family. Caskets were obtained from local carpenters and, later, from local furniture merchants.

In no other country in the world is the practice of embalming bodies as widespread as it is in the United States. Embalming gained popularity during the Civil War when arrangements were made with the families of soldiers killed in battle to embalm the bodies and return them home for burial. Eventually, the practice gained such popularity that it became the basis for the funeral industry.

Embalming was usually performed at home using crude hand pumps. These pumps were used to introduce the embalming fluid into the arterial system of the body, thereby temporarily preserving it. These same pumps were used in reverse to remove any unwanted fluids or gases from the body. It eventually became impractical for families to use their homes for the preparation of the body and the funeral service. Consequently these practices moved away from the home and came to be performed at the undertaker's establishment, the funeral parlor.

Sensing an opportunity for additional income, furniture merchants began to set aside space in their stores for the display of caskets and other funeral merchandise. From this arrangement, the modern funeral home industry was...

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