The paper reports on a study which aims to understand the role of cognitive and affective components of customer satisfaction in service encounters. The paper is structured to explore a brief synthesis of the extant literature on key conceptual issues concerning the role of emotion in service encounters. Subsequently, the paper explores the satisfaction-loyalty relationship when both cognitive and affective component are included. The focus of this study is to investigate the relationship between emotional satisfaction, service quality, customer loyalty, and relationship quality within a retail setting. A total of eight retail stores of Jalandhar city participated in the study. During a two-month data collection period, 200 customers were surveyed. Convenience sampling was employed and self-administered surveys were used to collect data. The Findings emphasize the dominant role of affective component in satisfaction loyalty relationship.