As
@KrazeeK120 is saying, nothing is ever stored on your band, itself. All it ever has is, more or less, an identification number. When you scan your magicband, that ID number is transmitted from your band to the terminal you scanned it at. The terminal will then transmit your number, as well as what you want to do (cash in a fastpass, charge a meal to your card, get in to a theme park, whatever) to a central computer. Then the computer, which actually stores all your entitlements, will transmit back, saying "yes" or "no".
(The above paragraph may not be exactly how it happens, but for us guests, it's close enough)
This is why if you lose a magicband, to contact guest services or a hotel lobby as soon as possible. They can go into the computer, and set any magic band to "lost." That way, if anyone finds it and tries to use it, the computer will always respond back with a "no" response. They'll also give you a card which will gave a new identification number, which is now attached to your account.
Also, in case someone finds your magic band and opens it up, trying to read the information inside, all they'll get is an ID number. They can't see what kind of ticket you bought, they can't see where you're staying, nothing. That number on the band isn't good for anything but Disney's system, and if you reported the band lost, any copies of the band will have the same aforementioned result.