Although service recovery has been identified as a key driver to retain customers, the effectiveness of service recovery remains unclear. Some studies reveal that good service recovery positively impact customers’ attitudes and behaviors. But other studies indicate that even excellent service recovery may not be enough to restore customers’ attitudes and behaviors to the original level. To explain the contradictory findings, this paper provides a conceptual understanding of how loyalty and emotion may influence the effectiveness of service recovery. Often characterized as trust and commitment, loyalty is based on customers’ long-held beliefs or attitudes, whereas emotion is characterized as a short-lasting, high intensity state that arises as a consequence of specific events or circumstances, indicating that the effectiveness of service recovery efforts are differentially affected by loyalty and emotion.