If the binary file was changed in more than one branch that is part of the merge, Git will always create a conflict since it cannot apply its merge strategies that are designed for text files. This is because usually you can't just move binary chunks around without completely corrupting the file. Also, what would the semantics be of e.g. merging an image file?
It's up to you to decide what you want to do. You might want to keep one of the versions, or perhaps, if it's image files, you want to "manually merge" them using a graphics manipulation program. Git really can't help you here.