The service recovery paradox: justifiable theory or smoldering myth?

The purpose of this study is to address the discrepancy between research that supports the service failure recovery and that which does not by examining customer satisfaction in the event of a service failure empirically.

The objective of the study was achieved by conducting role‐play experiments on undergraduate business students.

Analysis showed that a service recovery paradox is most likely to occur when the failure is not considered by the customer to be severe, the customer has had no prior failure with the firm, the cause of the failure was viewed as unstable by the customer, and the customer perceived that the company had little control over the cause of the failure.

This information should benefit service managers since service failures are common and typically trigger heightened customer attention. These findings may stimulate future research because the limitations of this study include the use of undergraduate business students and the examination of only one service setting. Nevertheless, this paper does demonstrate that, under the appropriate conditions, a customer can experience a paradoxical satisfaction increase after a service failure.