There is provided a displacement detection device including a light source, an image sensor and a processing unit. The light source provides light to a finger with a light source parameter. The image sensor receives reflected light from the finger, outputs valid images when the light source is being turned on and outputs dark images when the light source is being turned off. The processing unit determines a contact status according to one of the dark images and one of the valid images, and calculates a displacement according to two of the valid images to accordingly adjust the light source parameter.