Financial compensation refers to the act of providing a person with
money or other things of
economic value in exchange for their
goods,
labor, or to provide for the costs of injuries that they have incurred. The aim of financial compensation is the preservation of relationships between those engaged in economic exchange.[1]
Kinds of financial compensation include:
Damages, legal term for the financial compensation recoverable by reason of another's breach of duty
Financial compensation is often provided after
service delivery failure in order to regain
customer trust.[2] An associated response is to offer an
apology that communicates the transgressor feels
remorse.[1]
Financial compensation may be offered as an
incentive.[3] Some offers are too good to refuse. They may become an undue inducement in which they distort people's judgment, contravene their interests and thereby cause
harm.[3]
Financial compensation may be imposed by a
judge, before a court, to a victim.[4]