The applicability of digital image-processing techniques is studied to enhance the displacement resolution of far-IR Fizeau interferometry (FIFI). Two image-processing techniques are considered-the optical/digital fringe multiplication (O/DFM) method and the phasestepping method. The effect of multiple reflections on the fractional fringe order is analyzed mathematically and the results are verified by experimental data. The results indicate that the O/DFM method is fully compatible with the complex asymmetric intensity distribution produced by FIFI, while the phase-stepping method yields significant errors in fractional fringe orders when the surface reflectivity is high. The errors are quantified to provide an application guideline for the phase-stepping method.