The effect of guarantee terms on service recovery fairness

Crisafulli, Benedetta and Singh, Jaywant (2014) The effect of guarantee terms on service recovery fairness. In: 8th American Marketing Association Services Marketing Special Interest Group (AMA SERVSIG) International Service Research Conference 2014: Services Marketing in the New Economic and Social Landscape; 13-15 Jun 2014, Thessaloniki, Greece. ISBN 9789609874090

Full text not available from this archive.

Abstract

Delivering fair recovery following a service failure is crucial for a firm for restoring customer satisfaction, repatronage, and perceptions of fairness. In addition to the recovery efforts by employees, organizational policies, such as guarantees, are argued to impact fairness perceptions. Given that businesses extensively use service guarantees, research on perceptions of fairness towards such policies is relevant for designing effective guarantee policies. In this study, service guarantees are contended to function as service recovery tools, and signal the firm’s intentions to deliver justice/fairness. Drawing on signaling, attribution and justice theories, the study investigates the impact of guarantee terms on recovery fairness perceptions and attributions of negative motive. Employing a scenario-based experiment, this study shows that customer perceptions of recovery fairness vary according to the type of guarantee payout. Payout in the form of a discount does not restore fairness perceptions, and it even increases attributions of the firm’s negative motive for offering the guarantee. When combined with refund, discount generates positive inequity and related feelings of guilt. The study contributes to knowledge by showing that service guarantee policies function as service recovery tools. Importantly, the interface of signaling, attribution and justice theories explains how customers form perceptions of justice towards service guarantees. Implications for management comprise the need to avoid overcompensation in order to restore fairness perceptions and lower attributions of negative motive.

Item Type: Conference or Workshop Item (Paper)
Event Title: 8th American Marketing Association Services Marketing Special Interest Group (AMA SERVSIG) International Service Research Conference 2014: Services Marketing in the New Economic and Social Landscape
Organising Body: American Marketing Association
Additional Information: Best Paper Award. ISBN refers to proceedings on CD / memory stick.
Research Area: Business and management studies
Faculty, School or Research Centre: Faculty of Business and Law
Faculty of Business and Law > Kingston Business School (Strategy, Marketing and Innovation) (from August 2013)
Depositing User: Jaywant Singh
Date Deposited: 27 Jun 2014 12:26
Last Modified: 27 Jun 2014 14:03
URI: http://eprints.kingston.ac.uk/id/eprint/28621

Actions (Repository Editors)

Item Control Page Item Control Page