New service operations business models betting on consumers’ “present-biased preferences”, the human tendency of making time-inconsistent intertemporal choices and exhibiting naïvete about their self-control, have been proliferating recently. Of critical interest to both the academia and the industry is whether these new service operations business models generate a higher profit than the traditional retailer model, and whether the merchant’s optimal choice of business model conforms to that of the social planner with the aim of maximizing social welfare. We build a stylized model to address these intriguing questions. Our results show that consumers’ valuation of the underlying product or service, how naïve consumers are in believing meeting the requirement in the future (i.e., their present-biased preferences), and how differently consumers treat losses versus gains (i.e., the loss aversion effect) are three key factors affecting the profitability of these new service operations models. More specifically, we find that when consumers’ valuation of the service is relatively low, the new service operation models outperform the traditional retailer model in terms of merchant’s profits. However, the traditional retailer model performs better when consumers’ valuation is high. We also characterize conditions under which the merchant’s optimal choice of the business model deviates from the social optimum.