We examine the problem of supply chain coordination with contracts under twice producing and ordering mode when considering supply chain members’cost of handling returned products and comparative liquidation ad2 vantage , and determine conditions under which either return contracts or markdown allowance contracts will be more desirable. Efficient return contracts and efficient markdown allowance contracts are designed to coordinate the retail2 er to order the same quantities as in central control mode. Using means of numerical study , we find that as return price or markdown allowance increases , the retailer’s expected profit and overall order quantity increase and the re2 tailer tends to order more in period 1 , order less in period 2 ; the manufacturer’s producing quantity in period 1 in2 creases according to the retailer’s order and his producing quantity in period 2 doesn’t vary much ; the manufac2 ture’s performance decreases with increasing return price ; increasing markdown allowance in certain range can im2 prove the manufacturer’s performance , then after a threshold his expected profit decreases