A Bit(coin) of happiness after a failure : An empirical examination of the effectiveness of cryptocurrencies as an innovative recovery tool

This research provides the first examination of the effectiveness of cryptocurrencies as an innovative recovery tool. Through four experiments, we assess the effects of crypto-compensation against traditional compensation types (voucher/cash) on customer recovery satisfaction. Study 1 findings indicate that crypto-compensation is more effective than voucher and cash in improving customer recovery satisfaction. Further, it shows that consumer innovativeness moderates the effectiveness of crypto-compensation. After establishing the effectiveness of crypto-compensation, Study 2 finds a moderating effect of consumer choice in influencing crypto-compensation effectiveness. Study 3 reveals the differential effect of communicating different crypto-compensation benefits on customer recovery satisfaction. Finally, Study 4 concludes that familiar cryptocurrencies (e.g., Bitcoin vs. EOS) best restore satisfaction after a failure and that compensation message framing (i.e., cryptocurrency monetary value vs. real nominal value) moderates this relationship. Theoretical and practical implications are discussed.