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This study aims to examine the observing customer’s reactions, namely, gratitude, loyalty to the employee and tipping intention while observing other customer incivility during another customer service failure and the frontline employee’s emotional labor strategy.

A 2 (emotional labor strategy: deep acting vs surface acting) by 2 (service consumption criticality: high vs low) experiment is used to test the hypotheses.

The results reveal that observing an employee’s deep acting emotional labor (vs surface acting) leads to a greater level of gratitude among the affected customers and promotes their tipping and loyalty to the employee. However, there is no significant interaction effect of service consumption criticality and emotional labor strategy on customer gratitude.

This research builds upon the social servicescape, customer misbehavior and emotional labor literature by examining previously untested relationships.

In cases of other customer service failure, managers should effectively communicate to their employees how their emotional labor induces positive customer feedback. Currently, emotional labor is emphasized mostly regarding its negative effects on employees, but this research suggests that serving the recovery expectation of the affected customers, especially when it is served with authentic emotional displays, can promote increased tipping and loyalty behavior.

No research investigates customers’ emotional and behavioral reactions to employee emotional labor in the context of other customer service failure.

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