A majority of label rolls are read by labeling machines by sensing or "seeing" the gap between each label on the label backing paper.  Labels and backing paper are different materials and a standard label sensor "sees" this difference.

However, clear labels present an issue when the label sensor cannot differentiate between the label and the backing paper.  Clear label sensors elimiate this problem by using electrical fields to sense a change in the amount of the material.  In general, clear label sensors still "see" a gap, but rather than a different material, they see less material, allowing the labeler to perform to its potential even when applying clear labels.