Multiple internal reflection effects on the optical modulation of a commercial reflective parallel-aligned liquid-crystal on silicon (PAL-LCoS) spatial light modulator (SLM) are analyzed. The display is illuminated with different wavelengths and different angles of incidence. Non-negligible Fabry-Perot (FP) effect is observed due to the sandwiched LC layer structure. A simplified physical model that quantitatively accounts for the observed phenomena is proposed. It is shown how the expected pure phase modulation response is substantially modified in the following aspects: 1) a coupled amplitude modulation, 2) a non-linear behavior of the phase modulation, 3) some amount of unmodulated light, and 4) a reduction of the effective phase modulation as the angle of incidence increases. Finally, it is shown that multiple reflections can be useful since the effect of a displayed diffraction grating is doubled on a beam that is reflected twice through the LC layer, thus rendering gratings with doubled phase modulation depth.