Laser feedback interference is widely used for displacement measurement of non-cooperative targets due to its ultra-high sensitivity. However, by the same token, laser feedback interferometry (LFI) suffers from multi-channel optical feedback, which compromises measurement stability and accuracy. We perform both simulations and experiments to study the effect of dual-channel optical feedback on LFI systems based displacement measurement. Dual-channel optical feedback interference is the simplest and most representative form of multi-channel feedback interference. We evaluate system performance by varying which is the ratio of feedback level in the primary channel to the one in the secondary channel. The results indicate that the measured displacement curve is a linear line superimposed with nonlinear periodic errors when the target in the primary channel moves linearly and the target in the secondary channel stays stationary. Whereas, the curve is a periodic curve instead of a linear one, for the case when the target in the secondary channel moves linearly while the one in the primary channel stays stationary. Furthermore, the amplitude and shape of the periodic curves also depend on the parameter When is much less than 1, the displacement curve is sinusoidal, whereas the curve has a saw-tooth shape with larger amplitude for close to 1. In view of this situation, a new displacement measurement method, counting the cycles of the periodic displacement curves, is proposed. The current work can provide theoretical and experimental suggestions for improving the performance of existing self-mixing interferometry systems, and implementing ones with multi-channel optical feedback channels.