The Role of Perceived Justice within the Service Recovery Context in the Online Marketplace Moderated by Failure Severity

Abstract

In the rapidly evolving landscape of online marketplace (e-marketplace), customers’ loyalty is a critical determinant of long-term success. Service failure often affects customers’ loyalty negatively, leading to the need for an effective service recovery process. This study fills existing gaps by exploring the role of failure severity as a moderator variable in the relationship between perceived justice and recovery satisfaction. The study procedures were carried out using convenience sampling and a total of 320 responses were obtained. The data collected were then analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the hypotheses. The results showed that perceived justice dimensions played an essential role in recovery satisfaction. The dimension of procedural justice had the greatest effect, followed by distributive and interactional justice. The results also revealed that recovery satisfaction positively affected customers’ trust. In addition, customers’ trust enhanced loyalty, as indicated by repurchase intention and positive word-of-mouth (PWOM). Failure severity was reported to moderate the relationship between distributive justice and satisfaction, while interactional and procedural justice had no moderating effect. This study contributed to the theoretical understanding of service recovery and loyalty in global customers’ behavior, offering practical implications for e-marketplace management teams. In addition, monetary compensation (distributive justice) was identified as the critical dimension of service recovery in e-marketplace, where satisfaction increased with compensation that matched or exceeded expectations