Service failures are pivotal touchpoints that can reduce customer satisfaction, encourage negative word-of-mouth, and ultimately impact a firm’s market share. We advance a novel perspective that after a service failure occurs, matching incidental arousal inducing stimuli to one’s regulatory orientation can make the negative experience stemming from the service failure less deleterious. In three experiments (two stock out scenarios and one involving a rude salesperson), following a service failure, promotion-focused and prevention-focused individuals were exposed to high versus low arousal inducing stimuli. Three approaches available to retailers were used to manipulate arousal levels: background pictures (Study 1), colors (Study 2) and music (Study 3). When high (low) incidental arousal inducing stimuli was presented to those with a promotion (prevention) focus, this raised satisfaction, loyalty and referral for brands compared to when promotion (prevention) focused individuals were exposed to low (high) arousal inducing stimuli. Changes in self-rated arousal and affect valence levels (arousal and valence levels were measured following the service failure and then after exposure to the incidental arousal inducing stimuli) mediated the effect on these consumer behaviors. These insights extend theory by considering the combined effect of regulatory focus and affect. They also have practical relevance.