Service guarantee redress options in a hotel environment

Unconditional service guarantees are a popular marketing tool in the hotel industry worldwide. They promise total satisfaction and guests are free to invoke the guarantee whenever they are dissatisfied. While many hotels offer “money-back” compensation following guarantee invocation, others vary the payout depending on the severity of the service failure and still others will only compensate the customer if the problem leading to invocation of the guarantee cannot be fixed. To the researcher’s knowledge, the influence of compensation and fix (i.e., taking action to resolve the problem) on consumers’ perceptions of distributive justice has not been examined previously in a service guarantee context. This paper begins to address this gap by presenting a conceptual model and related propositions, arguing that redress (compensation and fix) is an important predictor of consumers’ perceptions of distributive justice, and that this relationship is moderated by service failure severity.

Service guarantees and customer satisfaction: an empirical study of guarantee type and service experience

Scenario analysis was used to examine empirically the relationships between guarantee type and service experience, and consumer satisfaction, for the service of an Internet Service Provider (ISP). The scenarios involved hypothetical situations in which several factors were varied: the existence of a problem; the invocation of a guarantee, the identity of the invoker; and the manner of resolution of any problem. Alternative service guarantees were associated with each hypothetical experience: a specific guarantee, and an unconditional guarantee. Overall, consumer satisfaction related to the nature of the service experience much more strongly than it did to the difference in guarantee type.

Service failure and recovery in the presence of service guarantees

This paper presents a conceptual model and propositions outlining how, in a service recovery encounter, service guarantees (unconditional and specific) operate in conjunction with other organisational recovery variables (guarantee facilitation and service provider concern), to influence customers’ justice perceptions and subsequent satisfaction evaluations.

There's a fly in my soup : the influence of service guarantees and personal requests on customer voice

Anecdotal evidence suggests that service guarantees and personal requests by service workers encourage customers to voice following failure. However, empirical support for these tactics in facilitating complaints to the organisation is limited. To address this deficiency, a 3 (guarantee treatment: none, unconditional or combined) x 2 (personal request to voice: yes or no) x 2 (failure severity: minor or major) full factorial, between subjects experiment was conducted in a restaurant context. Findings suggest that offering a service guarantee, regardless of whether it is unconditional or combined, can encourage voice. Severity of the failure was also found to be associated with voice. Surprisingly, however, a personal request to voice was not related to customers’ voice intentions. Implications of the findings are discussed.

Who chose this restaurant anyway? The effect of responsibility for choice, guarantees and failure stability on customer complaining

Customers often behave in the context of a group, with different behavior occurring in this context to that which transpires in an individual context. However, customer complaining behavior (CCB), including voice, negative word of mouth, in addition to that transmitted electronically, and exit, in a group setting has not been studied previously. A service failure during a group celebration at a restaurant and the pattern of CCB that ensues is examined. This is based on customers’ level of responsibility in restaurant selection on behalf of the group, the presence of an unconditional service guarantee, and the perceived stability of the failure. Findings suggest that customers are more inclined to exit when they have participated to a greater degree in choice and that the presence of an unconditional guarantee interacts with participation to influence negative word of mouth intentions. Perceived failure stability had the greatest influence on CCB.

Consumer guarantees in Australia : putting an end to the blame game

The focus of this article is on the proposed consumer guarantees component of the Australian Consumer Law. The Productivity Commission (PC), in its review of Australia’s Consumer Policy Framework, noted that it had not ‘undertaken the detailed analysis necessary to reach a judgment on the adequacy or otherwise of the existing regulation in this area, or the merits of alternative models such as those adopted in countries such as New Zealand’. Accordingly, it recommended that: ‘The adequacy of existing legislation related to implied warranties and conditions should be examined as part of the development of the new national generic consumer law’.

Consumer guarantees and the supply of educational services by higher education providers

The higher education sector is undergoing a number of significant changes, the implications of which have yet to emerge. One such change is the increasing reliance by higher education providers on the revenue generated by full fee paying international students to fund their operating expenses. The report by the Victorian Ombudsman, Investigation into how Universities Deal with International Students ('Victorian Ombudsman's Report') tabled in the Victorian Parliament on 27 October 2011, provides evidence that Australian higher education providers may be failing to meet their legal obligations to international students. The Victorian Ombudsman's Report is the result of an investigation into four Victorian universities teaching international students with a focus on accounting and nursing schools. The report contains evidence that the universities were admitting students with scores below, or at the lower end of, the International English Language Testing System ('IELTS') score considered acceptable. Alternatively, they were relying upon their own language testing admission standards and not on an independent test like the IELTS test. While the universities provided English language support services for their international students after they had been admitted, the Ombudsman was concerned that the universities 'have not dedicated sufficient resources to meet the level of need amongst international students'.

Improving the ability of guarantors to make a real choice : lenders' practices in taking third party guarantees

This article considers recent cases on guarantees of business loans to identify the lending practices that led the court to set aside the guarantee as against the creditor on the basis that the creditor had engaged in unconscionable conduct. It also explores the role of industry codes of practice in preventing unconscionable conduct, including whether there is a correlation between commitment to an industry code and higher standards of lending practices; whether compliance with an industry code would have produced different outcomes in the cases considered; and whether lenders need to do more than comply with an industry code to ensure their practices are fair and reasonable.

Bank guarantees and the reasonable expectations of beneficiaries

A bank guarantee has traditionally been viewed as a cash equivalent. This view is supported by the operation of the autonomy principle. However, the autonomy principle is subject to certain recognised exceptions both at common law and under statute. One of these exceptions is commonly referred to as the negative stipulation or underlying contract exception. In recent times the operation of this particular exception has given rise to a wealth of case law. This article examines whether this recent case law appropriately recognises the reasonable expectations of the beneficiary of a bank guarantee that a bank guarantee should function not only as a security but as a risk allocation device.

Parameterizing Unconditional Skewness in Models for Financial Time Series

In this paper we consider the third-moment structure of a class of time series models. It is often argued that the marginal distribution of financial time series such as returns is skewed. Therefore it is of importance to know what properties a model should possess if it is to accommodate unconditional skewness. We consider modeling the unconditional mean and variance using models that respond nonlinearly or asymmetrically to shocks. We investigate the implications of these models on the third-moment structure of the marginal distribution as well as conditions under which the unconditional distribution exhibits skewness and nonzero third-order autocovariance structure. In this respect, an asymmetric or nonlinear specification of the conditional mean is found to be of greater importance than the properties of the conditional variance. Several examples are discussed and, whenever possible, explicit analytical expressions provided for all third-order moments and cross-moments. Finally, we introduce a new tool, the shock impact curve, for investigating the impact of shocks on the conditional mean squared error of return series.

The effect of traffic shaping in efficiently providing end-to-end performance guarantees

This paper reports new results concerning the capabilities of a family of service disciplines aimed at providing per-connection end-to-end delay (and throughput) guarantees in high-speed networks. This family consists of the class of rate-controlled service disciplines, in which traffic from a connection is reshaped to conform to specific traffic characteristics, at every hop on its path. When used together with a scheduling policy at each node, this reshaping enables the network to provide end-to-end delay guarantees to individual connections. The main advantages of this family of service disciplines are their implementation simplicity and flexibility. On the other hand, because the delay guarantees provided are based on summing worst case delays at each node, it has also been argued that the resulting bounds are very conservative which may more than offset the benefits. In particular, other service disciplines such as those based on Fair Queueing or Generalized Processor Sharing (GPS), have been shown to provide much tighter delay bounds. As a result, these disciplines, although more complex from an implementation point-of-view, have been considered for the purpose of providing end-to-end guarantees in high-speed networks. In this paper, we show that through ''proper'' selection of the reshaping to which we subject the traffic of a connection, the penalty incurred by computing end-to-end delay bounds based on worst cases at each node can be alleviated. Specifically, we show how rate-controlled service disciplines can be designed to outperform the Rate Proportional Processor Sharing (RPPS) service discipline. Based on these findings, we believe that rate-controlled service disciplines provide a very powerful and practical solution to the problem of providing end-to-end guarantees in high-speed networks.

Distributed load adaptive scheduling for throughput and delay guarantees in fading wireless LANs

We consider a problem of providing mean delay and average throughput guarantees in random access fading wireless channels using CSMA/CA algorithm. This problem becomes much more challenging when the scheduling is distributed as is the case in a typical local area wireless network. We model the CSMA network using a novel queueing network based approach. The optimal throughput per device and throughput optimal policy in an M device network is obtained. We provide a simple contention control algorithm that adapts the attempt probability based on the network load and obtain bounds for the packet transmission delay. The information we make use of is the number of devices in the network and the queue length (delayed) at each device. The proposed algorithms stay within the requirements of the IEEE 802.11 standard.

Rigorous finite-time guarantees for optimization on continuous domains by simulated annealing

Simulated annealing is a popular method for approaching the solution of a global optimization problem. Existing results on its performance apply to discrete combinatorial optimization where the optimization variables can assume only a finite set of possible values. We introduce a new general formulation of simulated annealing which allows one to guarantee finite-time performance in the optimization of functions of continuous variables. The results hold universally for any optimization problem on a bounded domain and establish a connection between simulated annealing and up-to-date theory of convergence of Markov chain Monte Carlo methods on continuous domains. This work is inspired by the concept of finite-time learning with known accuracy and confidence developed in statistical learning theory.