The performance of a magneto-optic readout system is easily degraded by optical retardations, or polarization-dependent phase shifts. Optical interference structures meant to enhance the magneto-optic effect can produce retardation which reduces the readout signal. Polarization-dependent optical elements (prisms, mirrors, etc.) can either exacerbate or compensate for this problem. Retardation due to substrate birefringence is an even more serious problem because it can cause relatively large intensity fluctuations at the photodetectors. Injection-molding techniques which minimize normal-incidence birefringence in polycarbonate substrates have been demonstrated; however vertical birefringence, which causes large retardation for marginal light rays, remains an unsolved problem.