[Mr. Lim]

Can you include a picture of it wired? And a picture of the wires at the Digital Side Car?

If it is wired properly, you should see a small but visible red light on the encoder PCB. The red light should point at the black lines on the disc.

If you don't see a red light, then your +5V or GND are wired wrong, or worse, you may have ripped the solder pads off the PCB by plugging/unplugging the connector too harshly.

The connectors on these encoders are my nemesis. I am usually very careful when it comes to plugging and unplugging connectors in general. But for some reason I've trashed at least a half-dozen of these encoders by simply trying to unplug them.

If you DO see the red light, then check the spacing between the disc and the red light. The encoders come with a spacing tool, which just looks like a black washer with a groove along the side. USE THIS TOOL. You put the disc on black washer and push both on to the shaft together. The black washer will hit the two plastic tabs on the encoder base, and that's when you've hit the optimal distance. Remove the black washer, leave the optical disc on the shaft at the perfect distance.

Pinch the teeth on both sides of the disc to tighten the grip on the shaft before installing.