Unfortunately optical quadrature encoders can brake. Complete failure is usually the result of a incorrect input voltage. The test described on this page will let you know if your encoders are still giving some sort of output. Be aware though that this test does not check your encoders for drift. Drift is the condition where encoders miss some pulses, this may happen because the little led’s or photo diodes inside the encoder get old and less sensitive with time, dust and mechanical damage are other possible culprits.
Ok, so you have a encoder that outputs two channels in quadrature(maybe you have a index channel as well but we wont use it here). Now if your encoder is equipped with a line driver then you should have 2 channels (A & B) and two inversions of those channels(\A and \B). If you were to power up the encoder and connect a regular voltmeter to any of the above 4 wires. Then you should see that your voltmeter will show either 0 or 5V(or whatever your supply voltage is) as output, depending on the position of the motor shaft. Just be sure to turn the shaft very slowly otherwise you may not notice the voltage change.
Here are two pics of me trying this with a Maxon motor
The nice thing about the above test is that it can easily be done with a simple multimeter. Now if you have access to a oscilloscope then you could make a more elaborate test like the one bellow. Just make sure that you let the motor run on some fixed voltage(not too high), that way your scope will be able to trigger on the square wave that the encoder should be putting out.