Due to the common business practice of the “customer is always right,” many companies have a risk of dealing with illegitimate complaints. Although illegitimate complaints are a major issue in the hospitality industry, no study has yet examined the impact of illegitimate customer complaining behavior on customers who can witness the complaining and recovery process of others. To fill this gap, this research examines the effects of service recovery aimed at illegitimate customers on customers who witness the complaints’ behavioral reactions (revisit intention, tipping behavior, intention to complain) and the role of emotional expression. A 2 (Service recovery aimed at other customer; good vs. poor) × 2 (Legitimacy of complaining behavior of other customers: legitimate vs. illegitimate) × 2 (Emotional expression: aggressive vs. calm) scenario-based between-subjects factorial experiment is utilized. This research provides evidence that witnessing illegitimate complaints of other customers and the subsequent service recovery aimed at those complainers impacts the behavioral reactions of customers who witness that situation. This study broadens the service recovery literature by incorporating third-party justice theory with illegitimate customer behavior by specifically examining the unique case where the firm is not responsible for the service recovery. In addition, the findings address the benefit to service firms by understanding the impact of witnessing other customers’ service recovery treatment on observers’ subsequent behavioral intentions.
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