<![CDATA[This study focused on an empirical investigation of service failure and service recoveryin retail banking. Different types of failures and recovery strategies used by banks wereidentified by using critical incident interviews. A survey questionnaire was then developed tomeasure customers perceptions of the magnitude of service failure and the effectiveness ofservice recovery strategies. A number of research hypothesis were tested relating to thecustomers evaluations of particular banking failure and recovery strategies, their previousexperience of failure, demographic variables, and relationship. 400 questionnaires werecollected from customers of the banks in Yogyakarta. Service failure and service recovery foundthat importance and effectiveness, customers assessment were different between theexperienced and the non-experienced customers in several items, also among the customerswith different demographic variables. The different level of customer commitment causedsignificant difference of customers demand of service recovery.]]>
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