This research proposes the role of customer forgiveness in the context of service recovery. This research examines the mediating role of customer forgiveness in the relationships between service failure severity and reconciliation/avoidance as well as investigates the moderating effect of perceived justice on the relationship between service failure severity and customer forgiveness (Study 1a). The interaction effect of justice dimensions and service failure severity on customer forgiveness is also examined (Study 1b). The results confirm that customer forgiveness mediates the relationships between service failure severity and reconciliation/avoidance. Perceived justice moderates the relationship between service failure severity and customer forgiveness. Among the dimensions of perceived justice, the interaction effects between distributive justice/interactional justice and service failure severity on customer forgiveness are significant. In addition, this research also explores the role of customer forgiveness for online complaint handling strategies in the context of online complaint handling and indicates that the increase of customer forgiveness ultimately leads to customer engagement (Study 2). The results show that service recovery transparency positively affects customer forgiveness, which in turn leads to customer engagement. The effect of service recovery transparency on customer forgiveness is moderated by timeliness/personalization.

Chapter 1 Introduction 1
Chapter 2 Literature Review 11
Chapter 3 Research Methodology 27
Chapter 4 Data Analysis 39
Chapter 5 Conclusion and Suggestions 81

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