Magnetic stripe cards are most often associated with credit cards, but there are many uses for these cards that can benefit your small business and your customers. Blank cards are inexpensive, and the technology used to encode the cards is inexpensive.

Magnetic stripe cards can be used for membership and reward cards, gift cards, time or attendance systems, keyless entry systems or cashless payment systems. Before jumping on board, take a few minutes to learn about the differences in the technology and what you need to get started.


To write data on a card's magnetic stripe, you need a card encoder and the encoder's software. While it's often called credit card writer software, the software and its hardware are used for many different kinds of cards beyond credit cards.

How Magnetic Stripe Cards Work

Magnetic stripe cards store data in the form of positive and negative fields on the strip. A card reader then reads those patterns and translates it into a usable format. A card writer can change the magnetic fields on the card.

Magnetic cards usually store data on three tracks that each hold a set of numbers or characters. A membership discount card, for example, could hold the person's membership number, name and membership expiration date on the three tracks.

High Coercivity (HiCo) cards are durable but can only be encoded once. If the information on the card needs to change, you have to destroy the card and encode a new card. Membership cards and debit cards use this technology. The stripes are black.

Low Coercivity (LoCo) cards can be erased and reencoded when needed. LoCo cards require less energy to encode, but the encoding doesn't last as long, and it can be destroyed easily by magnetic fields. Hotel key cards use this technology. The stripes are brownish in color.

What You Need to Encode Cards

To add information to a card with a magnetic stripe, you need a card encoder. This device changes the charge on the stripe.

If you want to also print onto the cards, you need an ID card printer with a magnetic encoding module. The module adds about $400 to the cost of the ID card printer. The software required to operate the encoding module usually comes free with the hardware. You then need a magnetic stripe reader to read the data on the card.

An alternative approach is to get a dual-purpose machine, known as a reader/writer, which encodes the card and reads it as well but doesn't print anything on the card. The prices of these can range from $300 to $600. The credit card programmer software required to read and write is usually included with the device.

How to Use a Magnetic Stripe Card Encoder

After you get a magnetic stripe card encoder, decide where you want to put it. Depending on what the cards are used for, you likely need to balance security needs with easy access. If you are creating paid membership cards for a gym or room cards for a hotel, you may want to put it in a secure office. If you're making discount cards that don't have much value for a retail store, putting it at the front counter next to the point-of-sale computer would likely be better.

After connecting the card encoder to a computer, install the software it came with to that computer. When you launch the software, you specify the type of information to go on the cards. Each time you need to make a card, type in the required information, such as the person's name and membership number.

Once the information for the card has been entered into the software, swipe the card in the encoder, just as you would swipe a card to read one. A light on the encoder or a confirmation in the software tells you whether the encoding was successful.