Dispensers are used for refueling vehicles at the service station. During the refueling process, the velocity of fluid changes rapidly in several working conditions, which results in a rapid pressure increasing or a water hammer effect occurring. Water hammer, often causes leakage or failure of dispensers, occurs due to pump start-up and shut-down, valves opening or closing during the refueling process. This paper experimentally characterized and theoretically calculated the impact of water hammer on the dispensers at the service station. New designs of nozzle structure and new flow-rate control modes are made to reduce the water hammer in the fuel dispensing system. Eventually, all the water hammers are reduced significantly during the refueling process under the new design modes.