Online auction service failures in Taiwan: Typologies and recovery strategies

Online auctions are a new trading model that integrates auction mechanisms and the Internet. However, during the interaction between buyers and sellers, service failures inevitably occur. When service failures occur, selecting an effective service recovery strategy to correct the failure is an important issue. In this study, 867 failure incidents from buyers of online auction service encounters are classified into eighteen categories in three main groups, and the recovery strategies are classified into 10 types. An effective strategy is also identified for each service failure. Moreover, this study proposes the “service failure severity – post-recovery repeat purchase intention matrix” to rank the service failures that should be avoided. This study can help online auction sellers understand buyer perceptions of service failure and recovery strategies to improve service quality, avoid negligence and make proper recovery decisions.