How generous should compensation be? Review the following incident and comment. Then evaluate the available options, comment on each, select the one you recommend, and defend your decision.

“The shrimp cocktail was half frozen. The waitress apologized and didn’t charge me for my dinner,”

was the response of a very satisfied customer about the service recovery he received. Consider the following range of service recovery policies a restaurant chain could set, and try to establish the costs for each policy:

Option 1: Smile and apologize, defrost the prawn cocktail, return it, and smile and apologize again.

Option 2: Smile and apologize, replace the prawn cocktail with a new one, and smile and apologize again.

Option 3: Smile and apologize, replace the prawn cocktail, and offer a free coffee or dessert.

Option 4: Smile and apologize, replace the prawn cocktail, and waive the bill of $80 for the entire meal.

Option 5: Smile and apologize, replace the prawn cocktail, and offer a voucher of $80 for another dinner to be redeemed within three months.