The purpose of this study is to examine the effect of perceived justice and consumer's moral judgment of a service failure on recovery outcomes.
The research model is examined by adopting a field study approach followed by an experiment. The SPSS program with the PROCESS tool was used to analyze the simple moderation and moderated mediation effects.
The research findings show that consumer's moral judgment of a service failure moderates the relationship between service recovery (psychological compensation vs monetary compensation) and recovery outcomes (recovery satisfaction, negative word of mouth and repurchase intention). Moreover, the conditional indirect effect of service recovery on recovery outcomes through perceived justice is significant when service failure is seen as less moral. Specifically, consumers report lower perceived justice and react negatively to recovery measures when service failure is seen as less moral. In contrast, when consumers perceive a service failure as moral, a psychological compensation outperforms a monetary compensation, lessening negative word of mouth (NWOM).
These findings provide important insights into recovery measure development when considering consumer moral perspectives.
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