[DonRotolo]

Inside the encoders are small "wheels" with a pattern of very fine lines etched into them. The positioning of these wheels is important to having the encoders work.

Photographs will help us help you.

Please remove the circular black cover off the back of the encoder body and take a photograph showing the sensor body, sensor wheel, and shaft you are trying to measure.

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The wiring you have above sounds right, but to what are they leading? I hope to a digital input on the digital sidecar - orange to a 5 V pin, GND to a GND pin, and blue to one SIGnal input and Brown to a different signal input.

BUT, with +5 V and gnd, you should be seeing a scope pattern on both channels A and B, so I am suspecting your mechanical arrangement may be in need of adjustment.