An essential part of owning a dog, dog collars and ID tags serve a number of essential functions. Most obviously they act as a form of identification and personalisation, ensuring that if your dog does get lost that it will find its way back to its owner more easily.
First and foremost however they inform those around it that your dog is not a stray and that it is most likely trained and friendly. There are also additional benefits that individual collars can grant their wearers, including enhanced visibility at night and enhanced control.