Check the following:

Is the label size set correctly?
Specify the label size correctly.
You can check the settings in the BPM (Brother Printer Management Tool) as follows:

1. Connect your computer and the printer, and then make sure that the printer is turned on.
2. Start the BPM, and then click the Printer Configuration button.
3. Check the Paper Width/Paper Height settings in the FBPL tab.

Is the sensor sensitivity set correctly?
Calibrate the sensor by the Auto Gap or Manual Gap options. You can change the settings in the BPM as follows:

1. Connect your computer and the printer, and then make sure that the printer is turned on.
2. Start the BPM, and then click the Printer Configuration button.
3. Change the Threshold Detection setting in the Advanced tab, and then click the Set button.

Are the media sensors covered with dust?
Clean the Gap sensor and the Black Mark sensor. For details, see the FAQ: "How do I clean / maintain my printer?".