Whether you are preplanning a cremation for yourself or arranging a cremation for a loved one who has already passed away, you may hear the term “cash advance item” used in your planning. Most consumers don’t know what cash advance items are in this context, nor do they understand why they are important.
What are cash advance items?
Cash advance items are any goods or services that a funeral provider must purchase from a third-party vendor on behalf of their customer. The funeral director pays cash in advance to these vendors.
Cash advance items for a typical funeral might include but are not limited to: payments to florists for flower arrangements, payments to newspapers for obituary notices, and other payments to individuals such as pallbearers, musicians, or clergy for memorial services.
For direct cremation, third party cash advance items are typically limited to the required cremation permit (obtained through the county where the individual passed away) and copies of any death certificates the family wishes to obtain.
Cash Advance Items and the Funeral Rule
Cash advance items are governed under the Federal Trade Commission’s Funeral Rule. The Funeral Rule requires that consumers receive adequate information concerning the goods and services they may purchase from a funeral provider; cash advance items must be declared as such on the statement of goods and services.
According to the Funeral Rule, any mark-ups, rebates, commissions, and trade or volume discounts on cash advance items must be disclosed in writing to customers, although the exact amount of the mark-up does not have to be disclosed.
Markups on cash advance items are not a common practice with cremations. According to Jennifer Samora, Service Manager of the Neptune Society Tempe, Arizona office, “Generally speaking, Neptune Society does not charge a markup on any cash advance items ordered for customers. For our direct cremation services, the only cash advance items that will typically be charged are death certificates and required permits for cremation.” However, charges may vary by geographical location and individual situation.
The Funeral Rule also requires that funeral homes and cremation providers must provide an itemized written statement that includes total costs. Neptune Society has two versions of this – one for at-need cremation services and one for pre-planned cremation services. This itemized statement is required by law to include any charges for cash advance items. If it is unclear in advance what the exact amount of the cash advance items will be, a written “good faith estimate” must be provided.
In regards to pre-planned cremations, according to Samora, “Ninety percent of the time, prearranged policies are paid off in full, so at the time of need, cash advances are only needed for death certificates and the cremation permit fee.” However, each family’s circumstances are different, with charges and fees varying based on need and geographical location.
If you have any questions about cash advance items, please contact your nearest Neptune Society representative for clarification. For further information about funeral or cremation costs, please request a copy of our general price list by contacting us today.
Special thanks to Jennifer Samora, Service Manager of the Neptune Society Tempe, Arizona for her support and contributions to this post.