A gas pump nozzle has a little hole leading to a pipe with a balloon (or similar device) at the end. When the tank has filled up, gasoline reaches this hole and causes a change in pressure that causes the balloon to slightly deflate. The balloon deflating triggers an automatic-shutoff of the flow of gas.
It's not an electronic sensor. It's not a laser. A gas pump nozzle can sense when a tank is full and shut off because of physics and a clever mechanical device.
Let's venture into the physics first with ... the Venturi effect.
The Venturi effect is most simply explained with a garden hose. If part of a garden hose is compressed, there is change in both the pressure and speed of the water. As the water passes through a choke point, the pressure decreases and the speed increases. You'll be familiar with this concept if you've ever put your thumb on the end on the garden hose in order to have the water flow out faster.
Pay close attention to the pressure effect here. When there is a choke point, there is a reduction in pressure on one end. Keep this in mind as we move on to the mechanical device.
If you look up the nozzle of a gas pump, you'll notice that there is a tiny hole:
This hole is leading up a separate tube into a Venturi device in the gas pump nozzle. At the other end of the tube is a balloon (or another device but a balloon is the simplest way to explain this). Here's an overly simplistic diagram to explain how the device works:
When the tank is not full, gasoline flows into the tank and air begins to exit it. The air flows into the hole leading to the balloon. Because the entire pipe and balloon is filled with air, the pressure is even and the balloon remains blown up.
But once the tank is full, gasoline closes off the hole that was previously just taking in air. Since the density of gasoline is greater than air, the tube experiences a change in pressure. As a result, the balloon deflates. This is similar to how if you're sucking air from a straw and then put a finger on the end of it, your cheeks suck inwards.
The balloon is connected to an automatic-shutoff device. So when it deflates, it sets off a trigger to shut off the flow of gasoline.
​Sources​
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