An Apology With a Tiny Monetary Compensation Is No More Effective Than a Verbal Apology Alone

Abstract

How can organizations effectively deliver apologies? Prior research has indicated that apologies accompanied by significant costs are generally perceived as more sincere than those without any associated costs. However, these studies have not explored the impact of minimal financial compensation when the transgressor can only afford a nominal amount. This issue is particularly relevant to organizational apologies, where it may be challenging for a company to provide a substantial amount of compensation to every affected customer or stakeholder. In this study, we thus examined the effectiveness of a verbal apology combined with a nominal financial compensation in organizational settings. Drawing upon previously documented social and evolutionary psychological findings, our preregistered study tested the hypothesis that individuals perceive verbal apologies with ‘trivial’ compensation as less sincere than verbal apologies without any compensation (i.e., the trivialization effect). Contrary to our expectations, we did not observe the trivialization effect; verbal apologies with a trivial amount of financial compensation were as effective as verbal apologies alone. These findings suggest that a verbal apology accompanied by a minimal financial compensation does not necessarily enhance or detract from the perceived sincerity or effectiveness of the apology.