The present study examines existence of service recovery paradox in Indian banking industry. The
study is taken up in the tri-city of Chandigarh, Panchkula and Mohali. The respondents are categorized
into failure and no-failure groups on the basis of their service experience. Failure group constitutes
those respondents who have experienced service recovery, and has been further divided into
five sub-groups ranging from service recovery++ (service recovery better than expected) to service
recovery- - (service recovery worse than expected). Service recovery paradox is examined by comparing
service recovery++ group with no-failure group. The study shows evidence for existence of
service recovery paradox in relation to satisfaction. It has been concluded that for service recovery
paradox to exist, recovery effort has to be exceptionally good and much better than expectation
level of the customer. The study suggests that service managers should take service failure as an
opportunity to appease customers by providing a much better than expected recovery experience.
However, organizations should not plan to create service failure situations because if they falter on
imparting the recovery, customer satisfaction may be influenced negatively.
