The power of explanations in mitigating the ill‐effects of service failures

Purpose – To examine the role of explanations in influencing customer perceptions of service failures, this study investigated the impact of two types of explanations: retrospective excuses and anticipatory excuses on customers' fairness perceptions and their tipping behaviors. Design/methodology/approach – A 3 (explanation: absent, anticipatory, retrospective) × 2 (service recovery effort: no tangible compensation or 20 percent off the total bill) between‐participant design was used to test the hypotheses. Simulated dining experiences were enacted and videotaped to represent the six conditions. Findings – The findings of this study imply that customer‐contact employees might be able to influence customer impressions by offering a causal explanation for a service failure. Research limitations/implications – Owing to the restaurant‐oriented focus of this study, these results may not be generalizable to other service industries. Second, our stimuli involved service encounters that were clearly inadequate in terms of interactional treatment. Third, due to the research method employed in this study the dyadic nature of the service encounter is minimized. Fourth, the student sample somewhat limits the generalizability of the results. Practical implications – The results indicate that retrospective excuses might enhance customers' fairness perceptions more than anticipatory excuses. Yet, it is important to keep in mind that explanations for failures, even when combined with tangible compensation, are poor substitutes for inadequate interpersonal treatment. Originality/value – The findings of this study add to the evidence that offering an explanation for a service failure can positively influence customer perceptions. Moreover, the paper introduces tipping as a surrogate of satisfaction to the service recovery literature.