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These magnets' capacity for damage will vary from model to model, but they're usually not strong enough to demagnetize your card through casual, everyday activities like taking your card out of your wallet. Magstripes following these specifications can typically be read by most point-of-sale hardware, which are simply general-purpose computers that can be programmed to perform specific tasks. He tried it and it worked. Merchants will usually go through one or more of these steps without prompting because they want your business. Because of this, virtually all bank cards today are encoded on high coercivity stripes despite a slightly higher per-unit cost.
The black strip on the back of a credit card is the credit card and magnetic strip strip. When you swipe the strip through a credit card reader at a point of sale, the reader pulls the credit card and magnetic strip specific information that is stored in the strip. Once the information is read and accepted, the system communicates the transaction through the credit card network, so the amount of the transaction can be debited from the account. The process is so fast that the credit card company can record the transaction instantly. The first two almost always contain information, but the third is usually empty. The information contained on these tracks is encoded, and each has what is called a bit density.
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