In Canada, the tattoo that we use is a combination designated to a breeder by the Canadian Kennel Club that must be applied for. In my case it is BR5. The next number you would see is the which puppy born that year and finally a letter designated by the CKC for that year. All pups with BR5 would be from my kennel and no other. Every puppy has to be permanently identified before leaving the breeder's house. This number is on the application for transfer as well as were it's placement is -ie left flank - that the breeder must submit before a period of 6 months from date of sale. Now, most breeders do microchip. The number must be present on the application for transfer of ownership which, by the way, the breeder must submit to the CKC. It is the responsibility of the breeder to submit the new owner's information to the microchip company. Personally, I tattoo each dog with my CKC number as well as microchip. My daughter's best friend was the cruelty manager at a large shelter and she told me she found many migrated chips that wouldn't have been found had she not been the one doing it as the instructions staff are given are to check in the shoulder area only.
If a dog were to go missing the tattoo would lead it back to me and I would be able to check my records and tell the finder whose dog it was. However, if they went against my contract with them and had given the dog away or disposed of it in any way, I wouldn't be aware of that. So, while not fail safe, it is helpful. I wish the AKC would implement this system.