NO MERCY FOR PRODUCTS: RECOVERY EFFECTS FOR PRODUCTS AND SERVICES

ABSTRACT  Despite manufacturers’ efforts to implement stringent quality control and monitoring of their production processes, products can still fail. In contrast to the abundant literature on service failures, research on product defects is surprisingly scarce. When there are product failures customers may choose to complain and eventually have their product defect fully fixed. Alternatively, they can decide not to complain, forgoing the opportunity to have their product repaired. In this paper, we examine the impact of not complaining versus complaining, as well as the effect of the outcome of the complaint resolution process (i.e., whether defects are fully fixed or not) on the relationship between the original product manufacturer and the service operation (retailer) responsible for fixing product defects. We demonstrate that for non-complaining customers, the perceptions of product quality and loyalty to the product manufacturer still deteriorate. Further, we confirm support for the well-documented service recovery effect but fail to find the effect for product manufacturers. Even if product defects are completely fixed, customers’ perceptions of product quality and loyalty to the product manufacturer are damaged.