Faraday rotator mirror elements have been used in a number of applications as compensators for induced birefringence in retracing paths. In interferometric systems, such as the fiber-optic Michelson interferometer, this approach proved to be useful in providing maximum fringe visibility and insensitivity to the polarization state of light injected into the interferometer. However, it is found that, when the characteristics of the fiber coupler depend on the polarization state of the input beam, the efficiency of the Faraday mirror elements is limited. Theoretical analysis and experimental results in support of this statement are presented.