Microchips for pets have been around for quite a while now. They are considered routine for many breeders. If you purchase a puppy from a pet store your puppy will likely have a microchip already implanted. Many rescue and shelter groups also use microchips in the puppies and dogs they place.
As you probably know, a microchip is a small chip about the size and shape of a grain of rice that is inserted between an animal's shoulder blades. Its purpose is to provide a marker for information about your pet that can be scanned in case your dog is lost or stolen.
There are some pros and cons about microchips. On the plus side, microchips are a permanent form of identification for your dog. If your dog is ever lost or stolen he can easily be identified if found simply by using a scanner to find his microchip. Collars can be lost or removed and tattoos can fade or stretch, but the vast majority of microchips stay in place. Most microchips can be found by a scanner when used properly. However, the scanner must be used by someone who knows how to use it and it is sometimes necessary to move the scanner wand around to find the microchip.
Microchips must be registered with a database company, such as the AKC's Companion Animal Recovery service. The database service keeps track of your dog's (or other pet's) information - his name, your address, phone numbers, vet information, contact numbers, and so on. When your dog's microchip is scanned a data code is revealed which tells the person scanning that the dog is registered with the database company. A call to the database company will allow them to contact you, or another one of your contacts, to let you know that your missing dog has been found, no matter where he's been discovered. Your dog might be found 1000 miles from your home and it wouldn't make any difference. A couple of phone calls and you would know where your dog was so you could go get him.
According to AKC Companion Animal Recovery, lost pets with microchips are up to 20 times more likely to return home.
If you don't register your dog's microchip with a database company then it doesn't do any good to have the chip implanted. As a form of identification the chip will be useless. It would be like having a telephone in your house but never connecting it.
At one time there were problems with microchips because competing companies used chips that required different kinds of scanners. Animal shelters or vets might not have the right scanner to read your dog's kind of chip. However, today there are universal scanners which are supposed to be able to read all chips.
There are a few studies which have suggested that there could be health risks associated with the use of microchips. Microchips are being studied more extensively now since they are being used in some cases for humans (in children and the elderly in some countries). However, so far the data suggests that the chances of any health problems, such as tumors at the injection site, occur in a very small number of cases compared with the hundreds of thousands of animals which have been microchipped.
Source:http://ezinearticles.com/?Microchipping-Your-Dog&id=8150703
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