Monetary compensation 2.0: investigating the efficacy of crypto compensation

Monetary compensation is one of the key recovery tools in improving customer satisfaction following a service failure [1]. Majority of studies have looked at different levels of compensation (some vs. none or partial vs. full compensation) as well as different types (e.g., cash vs. voucher) [2, 3]. However, with the rapid advancement and implementation of technology in various sectors, academic research has not kept pace with the potential implication of such revolutionary technologies such as blockchain and particularly, the adoption of cryptocurrencies. Bitcoin, which is one of the most popular cryptocurrencies has found its way as an alternative form of payment in retail and hospitality sectors. For instance, there are various companies accepting Bitcoin as payment for purchasing an airline ticket, booking hotels and holidays, or even buying food. Though there is little doubt of the potential for cryptocurrency to revolutionize payment, there is still little business related research on the phenomenon and none in the area of service recovery compensation. Extending previous studies on service recovery, we provide the first examination of crypto-compensation, to shed initial light on the following questions: should firms offer crypto-compensation instead of voucher or cash? And does financial risk aversion moderate crypto-compensation effectiveness?