Issues
The Xbox wheel is similar to the standard controller in that it has to be synced to your system to work. Syncing means that your Xbox and the controller are communicating with each other. On the controller and console is a circle around the button with the Xbox logo called "the Ring of Light." A quarter of this circle, called a quadrant, should be illuminated. A lack of illumination, or the presence of blinking lights, on the Ring of Light means that the controller is not synced.
Causes
Syncing problems can result from interference or from moving the controller. Ensure your system is not near large metal objects, such as a refrigerator or filing cabinet. Metal stickers or decorations on the console can also interfere with the signal. Remove them and try to sync the controller again. Interference can come from wireless networks, if they are on the same 2.4 gigahertz of power that the racing wheel uses. Possible problematic networks can come from cellphones, microwaves, cordless phones and wireless LANs. Remove any possible offenders before trying to sync. The other cause of syncing problems is taking your controller to a friend's house. A controller, both the standard type and the racing wheel, can only be connected to one Xbox at a time. If your controller was last used at another house, it may still be synced with that Xbox instead of your own.
Syncing
It is usually not necessary to return the wheel to the store or contact customer service. The most common way to fix a non-functioning wheel is to simply resync it. First, press the "Power" button on the controller. This is the Xbox logo button surrounded by the Ring of Light at the center of the wheel. Press the "Connect" button on your console. The "Connect" button is near the "Power" button. Press the "Connect" button on the racing wheel. If the Ring of Light spins for more than 15 seconds without settling on one quadrant, try positioning the wheel close to the console, ensure they are facing each other instead of walls, and try again.
Other Issues
If your first attempt at resyncing does not work, you may be having issues with the power source. The racing wheel can be run off batteries or an AC cord. Try replacing the batteries. It takes two AA. It may automatically prioritize batteries if you have both plugged in, and dead batteries can interfere with function. If you use the AC power supply, remove the batteries and try again.