The move comes even as Apple CEO Steve Jobs denies there is a problem with the iPhone's antenna.
During a Friday press conference he presented data indicating the lost call problem is minor.
"Just one half of one percent. This is not a large number," Jobs said.
Anecdotal reports of lost calls started soon after iPhone 4's debut last month, but the company says less than 2 percent of the 3 million fourth-generation iPhones sold have been returned, a smaller percentage than the previous iPhone launch.
Still, Jobs apologized to his unhappy customers.
"We want to make all of our users happy," he said.
Customers buying the iPhone through September 30 will be eligible for the free "bumpers", or protective cases.
People who've already bought the $29 dollar can get a refund. Details will be available on Apple's website by late next week.