It is not clear what happened to Mimi that day, but some time later, Kim Rafter of Rogers acquired the animal from someone in good faith, renamed her Gizmo, and has cared for her ever since, KHOG-TV reported.
Meanwhile, Navarette relocated to Woodlake, Calif.
On Saturday, Mimi showed up at an animal shelter in Rogers where officials found the chip and called Navarette, who had kept the same cell phone number through the years. Rafter did not explain to KHOG how she lost the pooch at the weekend.
"As far as I know, it was just running loose," the shelter's manager, Bud Norman, told The Associated Press on Thursday. "It was picked up and brought into the shelter."
Assistant shelter manager Matt Colston said Navarette was clearly excited that Mimi had been found and immediately said he would pay for the Shih Tzu to be shipped to his home in California.
Norman said Mimi is in good health and has been well-cared for. He said Rafter called the shelter Wednesday after losing the dog, and that was how she found out that Mimi has another owner.
Rafter said it will be difficult to say goodbye to the animal her family has known as Gizmo for the past seven years.
"We've loved Gizmo for all of those years and taken care of her," Rafter said. "She's a part of our family and it would be devastating for us to lose her."
Rafter said she had no idea that the dog's real owner had been looking for her. "They told me she had been a gift to this man's wife from her dad and then he passed away," Rafter said.
"I'm a sympathetic person and I wouldn't want to take anybody's dog away, but I'm sure that, as little as she was when we got her, I'm sure we're the only ones she's bonded with."
Norman called the dog's saga "bittersweet" because while one family is thrilled, another is sad.
"It just amazes me when this happens," he said. "I'm hoping people understand the power of a microchip, if they love their animals."