Chatbots in complaint handling: the moderating role of humor

Purpose Artificial intelligence (AI) powered chatbot technology is increasingly used to handle customer complaints in the service recovery process. Built on the justice theory, this paper aims to explore the optimal way to utilize chatbots in handling customer complaints for service failure recovery and the moderating role of humor. Design/methodology/approach Two scenario-based between-subjects experimental design studies were conducted to examine the two aspects of justice in service failure recovery: Study 1 focuses on procedural justice manifested as perceived control and Study 2 on interactional justice assessed as social presence. Furthermore, the moderating role of humor is investigated. Findings The results indicate that both perceived control and social presence can improve chatbots’ effectiveness in handling service failures to regain customer satisfaction and the consequent revisit intention. However, humor shows opposite effects in the two studies: chatbots using humorous language in complaint handling may attenuate the positive effect of perceived control but enhance the positive effect of social presence. Practical implications The findings provide practical guidelines to the service industry regarding the optimal service design and technology deployment in customer service, particularly for an effective service failure recovery process. Originality/value This research contributes to the service failure recovery literature by investigating how the new service technology of AI-powered chatbots can effectively handle customer complaints for service failure recovery. Furthermore, the research reveals the nuanced effects of humor in different complaint-handling situations.