A printer has a print path, a code strip disposed in parallel along the print path, a sensor for sensing the code strip, a driving system for moving the sensor along the code strip, a timer, a memory and a position signal generator. The code strip has embedded position information, which the sensor reads. The sensor generates a first or a second code signal depending upon the position of the sensor on the code strip. The timer generates clock signals at a rate that corresponds to an expected rate of change of the first and second signals from the sensor when the driving system moves the sensor along the code strip. The memory is used to hold the locations of defective areas on the code strip. The position signal generator uses the sensor to generate a position signal when the sensor is not reading within any of the defective areas on the code strip, and uses the clock signals from the timer to generate the position signal when the sensor is moving within any of the defective areas on the code strip.