The Effect of Compensation on Repurchase Intentions in Service Recovery

Grewal, Dhruv, Anne Roggeveen, and Michael Tsiros (2008), “The Effect of Compensation on Repurchase Intentions in Service Recovery,” Journal of Retailing, 84 (4), 424-434.

Posted: 13 Apr 2016

See all articles by Dhruv Grewal

Dhruv Grewal

Babson College - Marketing Division

Anne L. Roggeveen

Babson College - Marketing Division

Michael Tsiros

University of Miami - Department of Marketing

Date Written: April 11, 2016

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 and Roggeveen, Anne L. and Tsiros, Michael, The Effect of Compensation on Repurchase Intentions in Service Recovery (April 11, 2016). Grewal, Dhruv, Anne Roggeveen, and Michael Tsiros (2008), “The Effect of Compensation on Repurchase Intentions in Service Recovery,” Journal of Retailing, 84 (4), 424-434.. Available at SSRN: https://ssrn.com/abstract=2763115

Dhruv Grewal

Babson College - Marketing Division ( email )

Babson Park, MA 02157
United States

HOME PAGE: http://faculty.babson.edu/dgrewal

Anne L. Roggeveen

Babson College - Marketing Division ( email )

Babson Park, MA 02157
United States

Michael Tsiros (Contact Author)

University of Miami - Department of Marketing ( email )

United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
169
PlumX Metrics