Every gift card includes a unique number in the form of a barcode, magnetic stripe, encoded chip, or even something as simple as a plain human readable number. It is that number which is activated, or “loaded”, with the proper dollar amount. This is done in the gift card transaction system database.
Magnetic stripes are thin layers of ferrous oxide applied to the surface of the card. Each oxide particle has a magnetic north and magnetic south pole. When first applied to the surface of the card, the arrangement of these particles is totally random, the stripe is magnetically neutral and is said to be “un-encoded” or blank. To add information to the magnetic stripe, the oxide particles are forced to align with their magnetic poles in the same direction. By periodically reversing the direction of the alignment this “encoding” creates a pattern of transitions between north south magnetic fields. It is these transitions that are read and interpreted as data.
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