Consumer travel and multinational service corporations have increased the opportunity for service failures where consumers from one culture experience service problems in another cultural setting. This study extended the Stauss and Mang model, which proposed the possibility that intercultural service failures exhibit lower seriousness ratings due to the customer’s attributing errors to cultural distance. Such a possible outcome has important implications for service providers whose customers are from different cultures, such as tourist or visiting businesspeople. A pretest, employing the critical incident technique, established descriptions of common service failures and recovery strategies for the sample frame. Domestic (in Taiwan) and foreign (outside Taiwan) service encounters were then compared in both failure and recovery stages, reported in an online survey employing a modified critical incident technique. Results showed that the apparent reduction in intercultural failure seriousness can be attributed not to the error itself, but to increased acceptance of the recovery strategy. These findings broaden the Stauss and Mang model by including the importance of recovery strategies, and the benefit gained by any recovery attempt within an intercultural service setting.