How Does Encoding Work on Gift Cards?

In our article "How Do Gift Cards REALLY Work?" we briefly talked about closed-loop gift cards and how they work with your Point of Sale (POS) System. We have received quite a response with people wanting to know more about how encoding works, so we are going to talk a little bit about magnetic stripes.

A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron-based magnetic particles. These magnetic particles are essentially a bar magnet about 20 millionths of an inch long.

What is the difference between black and brown stripes?

There are two types of magnetic stripes; HiCo (High Coercivity) and LoCo (Low Coercivity). HiCo is black in color and has a stronger magnetic field, while LoCo is brown and has a low-intensity magnetic field.

Now that we have picked out the type of magnetic stripe, what goes on it?

The information will be encoded on to a track or multiple tracks depending on your software requirements. Plastic Printers offers 3 track magnetic stripes, while most companies will only put information on track 1 or 2.

• Track 1 (%) → alphanumeric – Capital letters only (up to 79 characters)
• Track 2 (;) → numeric only (up to 40 characters)
• Track 3 (+ or ;) → numeric only (up to 107 characters)

Your point of sale company will usually have a track requirement (track 1, 2, or 3) as well as a character amount and starting number. As you see in the items above, track one will begin with a percent sign (%). Usually, this is not listed in the starting number and is simply included as it is required for track 1 to be read by your system. For track 3, our machines use a semicolon (;) as a starting sentinel instead of a plus sign (+) as both can be utilized.

How do I supply the information to be encoded?

1. Receive a starting number from your point of sale provider (or continue from a previous card order. We keep this information on file for our customers as a complimentary service.)

2. Request an Excel file that contains the necessary information from your point of sale company.  As you can see below, a thermal number (human-readable which is printed on the card) as well as the encoded number are listed in an Excel format.

   
    

* BONUS *

Did you know that the magnetic strip was invented during WWII as a way of recording audio? It wasn't until late into the 1960s that IBM first applied it to a plastic card for a US government security system.

Take the first step to start your gift card program, and our amazing representatives can answer any additional questions that you may have.