IDEAS home Printed from https://ideas.repec.org/a/eee/jouret/v84y2008i4p424-434.html
   My bibliography  Save this article

The Effect of Compensation on Repurchase Intentions in Service Recovery

Author

Listed:
  • Grewal, Dhruv
  • Roggeveen, Anne L.
  • Tsiros, Michael

Abstract

To explore when the presence of compensation enhances repurchase intentions after a service failure, the authors use an experimental procedure and evaluate the impact of compensation in different stability and locus of responsibility conditions. Findings from three studies using scenarios from different service industries indicate that compensation is necessary only when the company is responsible for the failure and the failure occurs frequently. If the failure occurs infrequently or the company is not responsible, compensation does not affect repurchase intentions. The results further demonstrate that stability and locus of responsibility attributions influence the perceived equity of the exchange, which mediates the effectiveness of compensation as a recovery effort. The authors discuss the theoretical and managerial implications.

Suggested Citation

  • Grewal, Dhruv & Roggeveen, Anne L. & Tsiros, Michael, 2008. "The Effect of Compensation on Repurchase Intentions in Service Recovery," Journal of Retailing, Elsevier, vol. 84(4), pages 424-434.
    • Handle: RePEc:eee:jouret:v:84:y:2008:i:4:p:424-434
    DOI: 10.1016/j.jretai.2008.06.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0022435908000468
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretai.2008.06.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Folkes, Valerie S, 1984. "Consumer Reactions to Product Failure: An Attributional Approach," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 10(4), pages 398-409, March.
    2. Folkes, Valerie S & Koletsky, Susan & Graham, John L, 1987. "A Field Study of Causal Inferences and Consumer Reaction: The View from the Airport," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(4), pages 534-539, March.
    3. Harris, Katherine E. & Grewal, Dhruv & Mohr, Lois A. & Bernhardt, Kenneth L., 2006. "Consumer responses to service recovery strategies: The moderating role of online versus offline environment," Journal of Business Research, Elsevier, vol. 59(4), pages 425-431, April.
    4. Goodwin, Cathy & Ross, Ivan, 1992. "Consumer responses to service failures: Influence of procedural and interactional fairness perceptions," Journal of Business Research, Elsevier, vol. 25(2), pages 149-163, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arora, Swapan Deep & Chakraborty, Anirban, 2021. "Intellectual structure of consumer complaining behavior (CCB) research: A bibliometric analysis," Journal of Business Research, Elsevier, vol. 122(C), pages 60-74.
    2. Rodolfo Vázquez-Casielles & Ana del Río-Lanza & Ana Díaz-Martín, 2007. "Quality of past performance: Impact on consumers’ responses to service failure," Marketing Letters, Springer, vol. 18(4), pages 249-264, December.
    3. Kalamas, Maria & Laroche, Michel & Makdessian, Lucy, 2008. "Reaching the boiling point: Consumers' negative affective reactions to firm-attributed service failures," Journal of Business Research, Elsevier, vol. 61(8), pages 813-824, August.
    4. Zhao, Taiyang & Ran, Yaxuan & Wu, Banggang & Lynette Wang, Valerie & Zhou, Liying & Lu Wang, Cheng, 2024. "Virtual versus human: Unraveling consumer reactions to service failures through influencer types," Journal of Business Research, Elsevier, vol. 178(C).
    5. Shannon W. Anderson & L. Scott Baggett & Sally K. Widener, 2009. "The Impact of Service Operations Failures on Customer Satisfaction: Evidence on How Failures and Their Source Affect What Matters to Customers," Manufacturing & Service Operations Management, INFORMS, vol. 11(1), pages 52-69, November.
    6. Gayle, Philip G. & Yimga, Jules O., 2018. "How much do consumers really value air travel on-time performance, and to what extent are airlines motivated to improve their on-time performance?," Economics of Transportation, Elsevier, vol. 14(C), pages 31-41.
    7. Bambauer-Sachse, Silke & Rabeson, Landisoa, 2015. "Determining adequate tangible compensation in service recovery processes for developed and developing countries: The role of severity and responsibility," Journal of Retailing and Consumer Services, Elsevier, vol. 22(C), pages 117-127.
    8. Sharifi, Seyed Shahin & Aghazadeh, Hashem, 2016. "Discount reference moderates customers' reactions to discount frames after online service failure," Journal of Business Research, Elsevier, vol. 69(10), pages 4074-4080.
    9. Pierre-Nicolas Schwab, 2015. "Online complaint handling practices: Company strategies and their effects upon post-complaint satisfaction," Working Papers CEB 15-005, ULB -- Universite Libre de Bruxelles.
    10. Tom Joonhwan Kim & Youjae Yi & Jongan Choi, 2020. "The boomerang effect of brand personality congruency in a product-harm crisis," Australian Journal of Management, Australian School of Business, vol. 45(4), pages 645-661, November.
    11. Mattila, Anna S. & Cho, Wonae & Ro, Heejung (Cheyenne), 2011. "The role of self-service technologies in restoring justice," Journal of Business Research, Elsevier, vol. 64(4), pages 348-355, April.
    12. T. Ravichandran & Chaoqun Deng, 2023. "Effects of Managerial Response to Negative Reviews on Future Review Valence and Complaints," Information Systems Research, INFORMS, vol. 34(1), pages 319-341, March.
    13. Alt, Elisabeth & Gelbrich, Katja, 2009. "Beschwerdebehandlung und Nachbeschwerdeverhalten im interkulturellen Kontext," Ilmenauer Schriften zur Betriebswirtschaftslehre, Technische Universität Ilmenau, Institut für Betriebswirtschaftslehre, volume 1, number 12009.
    14. Kuo, Ying-Feng & Wu, Chi-Ming, 2012. "Satisfaction and post-purchase intentions with service recovery of online shopping websites: Perspectives on perceived justice and emotions," International Journal of Information Management, Elsevier, vol. 32(2), pages 127-138.
    15. Fan-Yun Pai & Tsu-Ming Yeh & Liang-Yu Lin, 2018. "Relationship Level and Customer Response to Service Recovery," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(3), pages 1301-1319, December.
    16. Vanhouche, Wouter & Alba, Joseph W., 2009. "Generalizing from negative experiences," International Journal of Research in Marketing, Elsevier, vol. 26(3), pages 238-244.
    17. Xu Huang & Xuekun Liu, 2025. "Understanding complaints: the role of moral transgressions in e-commerce interactions," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-13, December.
    18. Gelbrich, Katja & Gäthke, Jana & Grégoire, Yany, 2016. "How a firm's best versus normal customers react to compensation after a service failure," Journal of Business Research, Elsevier, vol. 69(10), pages 4331-4339.
    19. Jessica Mikeska & Elise Johansen Harvey, 2015. "The Political CEO: An Event Study Comparing Consumer Attributions of CEO Behavior," Social Science Quarterly, Southwestern Social Science Association, vol. 96(1), pages 76-92, March.
    20. Davoud Nikbin & Ishak Ismail & Malliga Marimuthu, 2013. "The relationship between informational justice, recovery satisfaction, and loyalty: the moderating role of failure attributions," Service Business, Springer;Pan-Pacific Business Association, vol. 7(3), pages 419-435, September.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jouret:v:84:y:2008:i:4:p:424-434. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.