Abstract
It is a well known fact that mistakes are a critical part of every service. In services, often performed in the customer's presence, errors are inevitable. While it may not be possible to eliminate mistakes altogether, companies can certainly learn to recover from their mistakes. Such recovery attempts have been found to contribute towards enhancing customer loyalty. A good recovery can turn angry, frustrated customers into loyal ones. Various theories have been disseminated in the past to analyze how service recovery affects customer satisfaction, customer loyalty and customer's response to service failures. One of these is the Attribution Theory, which provides a basis for understanding how consumers respond to service failures (Folkes, 1984). Attribution theory predicts that the perceived reason for a service failure influences the level of consumer satisfaction and that the service failure itself is not the only factor to influence consumer's evaluation of the service; but that the reason for the failure itself is also a contributing factor.
