Abstract

Trust is considered a central construct in the relationship marketing and despite appreciating the role of service recovery efforts in restoring trust, service recovery literature has not explored the phenomenon much. Moreover, the position of trust in the service recovery context is still ambiguous. This led to the examination of the antecedents that explain the role of trust in the service recovery model and its consequential effect on the repurchase intention. A 3 (compensation level: 20%, 50% or 100%) x 2 (compensation type: refund or coupon) between subjects experimental study, based on a clothing scenario was conducted. The antecedents assessed to evaluate the role of trust were compensation level and type and satisfaction with service recovery. The model integrated restored trust as a serial mediator in the relationship between compensation level, satisfaction and repurchase intention. The results revealed that the inclusion of trust, as restored trust, generates a higher post-recovery repurchase intention. Our key finding of the role of trust as a serial mediator in the service recovery context implies that the companies should compensate for the failure as per customers’ expectation to generate a higher repurchase intention.

Key words: Service recovery, Compensation, Trust, Trust restoration, Repurchase intention