Service guarantee as a recovery strategy: the impact of guarantee terms on perceived justice and firm motives

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dc.contributor.authorCrisafulli, Benedetta
dc.contributor.authorSingh, Jaywant
dc.date.accessioned2016-10-21T13:28:50Z
dc.date.available2016-10-21T13:28:50Z
dc.date.issued2016-03-30
dc.description.abstractPurpose When a service fails, the guarantee policy of the firm can be employed as a recovery strategy. The terms of the guarantee determine the amount of payout and the ease of invoking the policy. The guarantee terms can, therefore, influence customer perceptions of recovery fairness and inferences about the firm’s intentions to provide fair recovery. The purpose of this paper is to examine the impact of guarantee terms on customer perceptions of justice, motive inferences, and repatronage intentions. Design/methodology/approach A between-subjects experiment was conducted in parcel delivery services. Findings Customer perceptions of justice vary across guarantee payout levels. Payout in the form of a discount does not restore justice perceptions, and leads to inferences that the firm offered the guarantee to maximize its profits. Conversely, full refund restores justice. Full refund plus discount is perceived as undeserved, and does not enhance justice perceptions. A moderately easy-to-invoke guarantee is perceived as fair, when it includes full refund. Inferences of negative firm’s motives, however, diminish perceived fairness of easy-to-invoke guarantees. Research limitations/implications Future research could examine the interaction of guarantee scope with payout and ease of invocation, and how types of motives differentially impact justice perceptions. Practical implications Full refund can enhance justice perceptions, whereas discount is perceived as unfair. Firms should offer full refund as guarantee payout, but refrain from offering a discount. Flexibility should be embedded in guarantee invocation procedures. Originality/value This study demonstrates that service guarantees employed as recovery strategies signal justice and the firm’s motives.en_UK
dc.identifier.citationBenedetta Crisafulli, Jaywant Singh, Service guarantee as a recovery strategy: The impact of guarantee terms on perceived justice and firm motives, Journal of Service Management, Vol. 27 Iss: 2, pp117-143en_UK
dc.identifier.issn1757-5818
dc.identifier.urihttp://dx.doi.org/10.1108/JOSM-10-2015-0309
dc.identifier.urihttp://dspace.lib.cranfield.ac.uk/handle/1826/10825
dc.language.isoenen_UK
dc.publisherEmeralden_UK
dc.rightsAttribution-NonCommercial 4.0 International
dc.rights.urihttp://creativecommons.org/licenses/by-nc/4.0/
dc.subjectJusticeen_UK
dc.subjectSignaling theoryen_UK
dc.subjectService recoveryen_UK
dc.subjectGuaranteeen_UK
dc.titleService guarantee as a recovery strategy: the impact of guarantee terms on perceived justice and firm motivesen_UK
dc.typeArticleen_UK

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