<p>In real life, return-freight insurance generally fails to effectively identify excessive returns due to consumer impulse consumption. Taking this into account, we introduce an e-coupon policy to reimburse returned consumers for return-freight fees and focus on the online retailers’ choices of return-freight compensation policies. We develop a novel model for consumer returns with e-coupons to compensate for the return-freight fees, and analyze the optimal selection of return-freight compensation policies for the online retailers. Results show that the e-coupon policy can be an effective alternative to free return-freight insurance policy, especially for retailers facing high insurance premiums. Furthermore, both the return rate and discount rate play a critical role in the application of the e-coupon policy, and retailers can expand the potential of the e-coupon policy by improving the discount rate at a moderate return rate. Finally, we suggest that online retailers can choose an appropriate return-freight compensation policy based on their own return situation and grasp of the return policy.</p>