Make sure you are using a version of the software that was released after the Encoder system was invented.

For Logger Pro, version 3.8.6.2 or newer is needed.
For Original LabQuest, version 1.7.2 or newer.
For LabQuest 2, version 2.3.3 or newer.
For LabQuest 3, any version.
For Graphical Analysis 4, version 4.5 or newer.
Updates are available at: https://www.vernier.com/downloads

Note that when using a LabPro interface, the Motion Encoder will never Auto ID. You will need to open an experiment file or manually configure the sensor.