No GPS chip can help trace the location of a lost pet, but a small GPS device can be secured in a dog's collar. This enables the owner to pinpoint the location of his missing dog.
Pet microchips are not GPS devices, as HomeAgain points out. Pet microchips are radio frequency identification implants. The microchip uses RFID and serves as the pet's ID. It cannot help the owner find his dog, but it allows the finder to return the pet to its owner by bringing it to an animal shelter or a veterinarian where the pet is scanned for identification. The shelter or vet then contacts the owner using the information on the pet's microchip.