What type of compensation can be given as a service recovery tool?

• A. Cash refunds
• B. Skymiles or travel voucher
• C. Complimentary upgrades
• D. Future flight discounts

Answer: (B)

The concept of service recovery refers to the actions taken by a company to rectify a problem or a complaint from a customer. It aims to restore customer satisfaction and often involves compensatory measures. A service recovery tool can take many forms, but one effective option is offering skymiles or travel vouchers, as they directly add value to a customer’s future travel experiences with the airline.

Offering skymiles or travel vouchers allows the customer to use that compensation in a way that benefits them in future transactions. It engages the customer with the airline and encourages loyalty by providing them with something they find useful. By giving them a tangible benefit that they can redeem on future flights, the airline positions itself positively in the customer’s mind, increasing the likelihood of repeat business.

This approach also reflects an understanding of what travelers value, as many frequent flyers appreciate loyalty programs that offer rewards. It also allows the airline to manage their cash flow more effectively compared to outright cash refunds, while still demonstrating responsiveness to customer issues.

In contrast, while cash refunds and future flight discounts can also serve as compensation, they do not necessarily enhance the relationship with the airline in the same way that loyalty rewards do. Similarly, complimentary upgrades, although appreciated, may not be as universally applicable or valued by