What is a magnetic stripe?

A magnetic stripe is short strip of magnetic tape attached to a plastic card that is encoded with data, which may be read by “swiping” the card in a reading device.

How do magnetic stripes typically work on a gift card?

Each gift card has a magnetic stripe that is encoded with a unique serial number. This serial number may also be printed in human readable characters under the magnetic stripe. When a customer purchases a gift card, the magnetic stripe is “swiped” using a card reading devise connected to a point of sale (POS) system. The point of sales system recognizes the gift card’s unique serial number and prompts the cashier for a value to be assigned to it. For this example, the customer wishes to put $50.00 on the gift card. The cashier takes the customer’s $50.00 and keys in this amount. The point of sales system then assigns this value to the gift cards serial number. The value of the gift card is not stored on the card but within the point of sale system.

When the customer returns with the card, the magnetic stripe is “swiped” or the human readable characters are entered. The point of sale system then displays the stored value assigned to its serial number. The customer may add additional funds to the card or use its value to make a purchase. The history of the transaction and remaining balance amount is stored within the point of sale system for reference and future transactions.

What about lock systems?

Magnetic stripes are also used with lock systems such as hotel or institutional. The magnetic stripe is embedded in the back of a key card and the lock system encodes each card with the unique code to gain access.

How do I know what type of magnetic stripe or encoding my Point of Sale system or Lock system requires? How can you ensure a magnetic stripe will work?

If you are not sure what type of magnetic stripe or encoding your system requires, please contact your point of sale system or lock system provider. They can assist you with which type of magnetic stripe will work best and the necessary characters to be encoded for your particular system.

Please ask your point of sale (POS) system or lock system provider the following questions:

  • What magnetic stripe coercivity is required for my system? Hi-co or lo-co?
  • What track or tracks should be used to encode the data? 1, 2 and/or 3?
  • Are there any specific characters or number of characters necessary to be used in the encoded data?