Microchips are small identification devices implanted under your pets skin between their shoulder blades (usually).  They are about the size of a grain of rice, and have serial numbers encoded that can be read by microchip scanners. Most veterinarians and animal control agencies have these scanners, so when a dog or cat is found and brought into the facility, they are able to read the number and contact the owner.
Numerous brands of microchips exist, but they all work the same way.  We use Home Again, which provides additional perks to their clients’ pets.  Along with the pet’s information being kept in their database for life, they offer optional additional services at a small cost.  For an additional $14.99 per year, your pet can be enrolled in their “perks program”.  This includes up to $3,000 worth if insurance if your pet is injured WHILE LOST.  If you have not reported them missing, the insurance coverage is not valid.  Additioanl perks include: one free phone call per year to poison control (normally a $45 call), phone access to a veterinarian 24 hours a day/7 days a week for advice regarding an emergency situation, and the ability to make lost posters on their website.  Lastly, if your pet is missing and you notify Home Again, they will contact all of the local vet offices and animal control agencies near your home to let them know to keep an eye out for your pet.

The normal costs for these services include:
Microchip with implant fee: $41
This cost includes the microchip, the cost to implant, the activation fee, and 1 year of the “perks program”.  Additional pets within the same household are at a reduced cost.
This photo shows a microchip.  It is only 1/2 inch long.