We studied this phenomenon with the USC marketing professors Debbie MacInnis and Valerie Folkes. In one experiment, half the participants witnessed a supposed bank representative publicly reprimanding another for incorrectly presenting credit card information. Only 20% of those who’d seen the encounter said that they would use the bank’s services in the future, compared with 80% of those who hadn’t. And nearly two-thirds of those who’d seen the exchange said that they would feel anxious dealing with any employee of the bank.
What’s more, when we tested various scenarios, we found that it didn’t matter whether the targeted employee was incompetent, whether the reprimand had been delivered behind closed doors (but overheard), or whether the employee had done something questionable or illegal, such as park in a handicapped spot. Regardless of the circumstances, people don’t like to see others treated badly.