The purpose of this paper is to explicitly incorporate manufacturer’s returns policy incorporate into Weber’s triangular location model and reexamine the effect on price and profit of manufacturer and retailers under alternative spatial pricing policies. To address this issue, the benchmark setting is there is a single upstream manufacturer provides a limited shelf life product, and sells it to two downstream competitive retailers. The manufacturer behaves like a Stackelberg leader, and the retailers must have stocks in hand before selling to consumers. Base on our results, we have the following conclusions. 1. Whether there is a returns policy or not, the equilibrium results make no difference. 2. The ranking of choice make variables under a1temative pricing policies will not be influenced by retailer competition or returns policy. 3. When manufacturer accepts returns from the retailers, it intensifies the competition between retailers and benefits the manufacturer. The insight about the role of return policy is that it can be an another instrument to raise the manufacturer’s profit.