Microchipping dramatically increases the chance of lost pets being reunited with their owners. Compulsory microchipping for dogs is law in the UK and has improved welfare outcomes.
The welfare impact of microchipping is primarily through reunification: animals that are found and taken to rescue centres or veterinary practices can be rapidly identified and returned to their owners, avoiding the welfare cost of shelter stress and reducing the number of animals euthanised for space. Cats roam widely and are frequently found in areas distant from their homes — compulsory microchipping would significantly improve reunification rates for the UK cat population. Registration on an updated database is as important as the chip itself — an unregistered chip cannot reunite a pet with its owner.