ABSTRACT The density field reconstruction technique has been widely used for recovering the baryon acoustic oscillation (BAO) feature in galaxy surveys that has been degraded due to non-linearities. Recent studies advocated adopting iterative steps to improve the recovery much beyond that of the standard technique. In this paper, we investigate the performance of a few selected iterative reconstruction techniques focusing on the BAO and the broad-band shape of the two-point clustering. We include redshift-space distortions, halo bias, and shot noise and inspect the components of the reconstructed field in Fourier space and in configuration space using both density field-based reconstruction and displacement field-based reconstruction. We find that the displacement field reconstruction becomes quickly challenging in the presence of non-negligible shot noise and therefore present surrogate methods that can be practically applied to a much more sparse field such as galaxies. For a galaxy field, implementing a debiasing step to remove the Lagrangian bias appears crucial for the displacement field reconstruction. We show that the iterative reconstruction does not substantially improve the BAO feature beyond an aggressively optimized standard reconstruction with a small smoothing kernel. However, we find taking iterative steps allows us to use a small smoothing kernel more ‘stably’, i.e. without causing a substantial deviation from the linear power spectrum on large scales. In one specific example we studied, we find that a deviation of 13 per cent in $P(k∼ 0.1\, h{\rm \,\,Mpc^{-1}})$ with an aggressive standard reconstruction can reduce to 3–4 per cent with iterative steps.