Abstract

The rise of e-commerce poses new challenges for companies’ complaint management. As online trans-actions are characterized by a limited degree of interpersonal interaction, traditional recovery mech-anisms that take advantage of the employee-customer relationship become less important. Conse-quently, it needs to be understood how e-commerce companies can best compensate their customers after a complaint. Our research addresses this gap by assessing the impact of discounts versus vouch-ers on post-complaint consumer purchase behavior. Leveraging the advances in information systems, we base our analysis on an extensive data set that is provided by a leading fashion online retailer and includes more than 24,000 complaints and 450,000 orders. The results show that discounts are more effective in encouraging sales after a complaint. We further examine how customer characteristics moderate this relationship and find that the effect is stronger for price-conscious customers and less strong for frequent customers. Our research contributes to the service marketing literature by trans-ferring existing theoretical foundations to the online retailing environment. We further provide practi-cal guidance to managers how to utilize the extensive amount of data available to identify the most suitable compensation for individual customers.

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