No laughing matter, or a secret weapon? Exploring the effect of humor in service failure situations

•Humor in service failure situations allows customers to get rid of their anger.•Humor turns out to be a method of service recovery when considered funny.•Humor provides a feeling of relief which facilitates subsequent cognitive assessments. Several psychological studies indicate that, in certain situations, humor can reduce tension and lead to a feeling of relief. In the literature on service management, however, the effect of humor in appeasing disgruntled consumers when services break down is almost unexplored. This paper seeks to answer the question: Can humor have a positive effect in such situations, leading to greater “leniency” on the part of the injured party, or does it intensify the consumer's negative experience of the service? We do this by analyzing consumer reactions to humor as a tool for “service recovery”. We conduct a number of vignette experiments, the results of which confirm the positive effects of self-deprecating humor on customers, but at the same time show that the humor has to be experienced as particularly funny, otherwise it is less effective than traditional service recovery tools, such as a sincere apology or financial (or other) compensation.