Microchips are tiny devices that are implanted under the skin using a needle.
When a scanner is passed over the chip it sends out radiofrequencies that activate it and the chip sends a unique number to the scanner so that you can read it.
The chips numbers are stored on a computer and have the owners phone number and the pets name this means that if you where to lose your pet then when he/she has been found then your pet would be taken to the vet and scaned for for a microchip.
The scanner would beep and the vet would ring the people that store the microchip numbers and they would tell the vet who would ring the phonenumber next to it.