The microchip is injected under the skin on the neck of the dog. Each chip has a special number code so that when it is read by a scanner the individual animal can be recognised and the owners details found easily. If the animal changes home the new details must be registered.
Lost pets are much more likely to be returned if they are chipped. It is absolute identity proof if the animal is stolen and if every animal were chipped cruelty cases would be so much easier to prove and prosecute.