How consumers perceive and react to AI-chatbots in service recovery: the serial mediating role of mind perception and psychological distance

Purpose In artificial intelligence (AI)-mediated contexts, interactions are carried out by non-human entities that assume roles traditionally performed by human employees raising questions about their effectiveness in emotionally charged contexts such as service recovery, particularly in high-touch industries like hospitality and tourism. This study investigates the differential effectiveness of economic vs symbolic recovery strategies enacted by AI chatbots in shaping customer recovery satisfaction, forgiveness and revisit intention. Design/methodology/approach Three experimental studies were conducted in the airlines and hotels settings, recruiting participants from an online panel who interacted with a real chatbot in a simulated service failure recovery scenario. Findings Study 1 reveals that while chatbot economic and symbolic recovery strategies are equally successful in fostering customer forgiveness, economic recovery stands out for its stronger impact on recovery satisfaction. Study 2 uncovers the mechanism linking AI-chatbot recovery strategies to customer recovery outcomes, revealing that only symbolic recovery enhances perceived experience and reduces psychological distance, whereas economic recovery and perceived agency show no such effect. Study 3 identifies a boundary condition: economic recovery outperforms symbolic recovery under high failure severity, but both are equally effective under low severity. Originality/value Our study offers novel insights into the effectiveness of AI-driven recovery by demonstrating that the most successful chatbot is not the one that fully mimics human employees, but the one that leverages its distinctive capabilities-flawless execution of compensation and well-designed empathy. By prioritizing care, competence and customer emotional well-being over artificial independence, firms can maximize recovery satisfaction and reinforce customer relationships.