Estimates of cloud droplet effective radius ( <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">r<sub>e</sub></i> ) and optical thickness (τ) can be derived using reflected sunlight in a visible non-absorbing channel combined with reflectances from a near IR channel that is absorbing (e.g., The bi-spectral method or BSM). Discrepancies between BSM-estimated <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">r<sub>e</sub></i> and collocated in situ measurements are commonly attributed to a violation of the assumptions used in the BSM algorithm such as plane parallel geometry, and a single mode droplet size distribution. This research uses Markov Chain Monte Carlo experiments to examine the impact of precipitation on BSM-retrieved <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">r<sub>e</sub></i> near optical cloud top by comparing the retrievals and associated uncertainties obtained from two types of experiments assuming a unimodal or bimodal drop size distribution. Where rain is present, BSM-retrieved <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">r<sub>e</sub></i> overestimates the true cloud mode <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">r<sub>e</sub></i> . Moreover, there is no longer a unique measure of <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">r<sub>e</sub></i> within the precipitating liquid-phased clouds, resulting in a substantial increase in retrieval uncertainties. This leads to a corresponding loss of information on total number concentration and liquid water content near cloud top. It is found that <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">r<sub>e</sub></i> biases are not strongly correlated with properties exclusively pertaining to rain, such as rain water content or precipitation rates, but tend to be a function of the ratio between rain and cloud water content and the cloud total number concentration. These results highlight the need for additional independent information such as from an active or passive microwave sensor that can identify the presence of precipitation and constrain additional aspects of bimodal droplet distributions.