We examine how channel members’ ability to recognize repeat and new customers affects service provision, profits, and welfare. In decentralized channels, when only retailers can recognize customers, customer recognition increases service levels. However, in centralized channels or decentralized channels when both manufacturers and retailers can recognize customers, customer recognition reduces (increases) service levels if service investment persists (diminishes) sufficiently over time. Moreover, in centralized channels, customer recognition reduces firm profits and consumer surplus, whereas in decentralized channels, when manufacturers and retailers can recognize customers, customer recognition increases channel members’ profits but decreases consumer surplus.