[sanddrag]

Hot glue works. You can also take a small pocket knife or similar tool and gouge a hefty scratch in the inside of the hole. It should raise a burr just enough to provide a little bit of friction to snugly fit the encoder shaft in there.

You could also try a little piece of scotch double sided tape on the encoder shaft, to take up some of the space.

If you were careful about it, you could probably even use an automatic spring loaded center punch to punch a dimple into the encoder shaft itself, causing it to deform outward a little bit.

I will also note, we typically would not mount encoders of this sort. It's an over-constraint. We would fit them to the shaft, and then just let them float free, placing a zip tie on the cable, just to prevent the body from rotating.