The effect of service failure types and service recovery on customer satisfaction: A mental accounting perspective

Shih Chieh Chuang, Yin Hui Cheng, Chai Jung Chang, Shun Wen Yang

Research output: Contribution to journalArticle

46 Citations (Scopus)


Service failure recoveries play an important role in the service process. Previous research on service recovery has focused on the development of classification schemes, such as service failure types (e.g. outcome- or process-related failure), service recovery attributes (e.g. psychological or tangible recovery), and failure magnitude. Few studies in the literature have developed a theory-driven model of customer satisfaction that considers whether different types of service failure warrant different types of service recovery. This article, which reports the results of two studies, draws on mental accounting theory to examine the effect of the relationship between service failure and service recovery on customer satisfaction. The results of Study 1 show that customer satisfaction is greater when service recovery efforts truly make up for what customers have lost and that prior experience of service failure has a significant influence on the effectiveness of those efforts. The results of Study 2 indicate that the magnitude of a service failure also has an impact on the effectiveness of service recovery efforts.

Original languageEnglish
Pages (from-to)257-271
Number of pages15
JournalService Industries Journal
Issue number2
Publication statusPublished - 2012 Feb 1
Externally publishedYes



  • customer satisfaction
  • mental accounting theory
  • service failures
  • service recoveries
  • services

ASJC Scopus subject areas

  • Strategy and Management
  • Management of Technology and Innovation

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