encoder help

I recently bought a small Milltronics Vertical CNC and am having a
problem homing the machine. The Z goes first then the X and Y, When
the X hits the limit switch and backs off, it then travels forward
again looking for the marker on the encoder. Sometimes it finds it,
but it usually takes 6 or 8 tries. It E stops every time it misses,
and I have to start over. Does anybody know if the accuracy will be
affected when I run it after it finally finds the home, could it
forget where it is, or is it just a problem during homing? I talked
to the factory and the price of a new encoder is more than $300, and
they said my old one couldn't be fixed. Are they filling me full of
BS, or are the encoders really a "sealed unit"?
gunmaker