Most cities and towns have containment laws that prohibit dogs from running loose. Many homeowners associations also prohibit physical fences, and as a result electric or "invisible" fences have become a popular option for dog containment. Dog owners should be aware, however, that these fences can be dangerous to dogs.
Shock
Electrical fences send an electric pulse, or shock, through the dog whenever he gets too close to the fence line. Manufacturers equate this shock to the jolt caused by a build-up of static electricity. To dissuade the dog from crossing the fence line, however, the shock must be at the very least unpleasant. Often dogs will stay in the yard until something very interesting, such as a squirrel, comes along outside the fence; then they will risk the shock to get to the squirrel, but they won't risk the shock to come back into the yard.
Equipment Malfunction
Electrical fences depend on underground wiring to stay connected, and on the collar batteries to stay charged. The dog must also be wearing the collar at all times in the yard, of course. If any of these situations fail -- the most common being the collar batteries running out -- the dog will no longer be shocked when approaching the fence, and thus will not be contained by the fence. This opens up the dog to all the dangers of roaming loose, such as being hit by a car. Occasionally, a collar will short-circuit and cause an electrical burn to the dog; these occurrences are rare but can cause significant physical and psychological damage to the dog.
Intruders
The largest drawback of electric fences is that they do not keep other critters out of the yard. A dog with an invisible fence is more vulnerable to an altercation with a roaming dog, skunk, raccoon or other wildlife; the other animal can easily get into the yard, but the dog cannot escape by leaving the yard. Without a physical fence, a child could wander into the yard, a highly potential bite situation. In addition, dog thieves typically find electrical fences far easier to overcome than physical fences.
Aggression
For some dogs, electrical fencing can lead to aggressive behavior. The frustration of seeing prey objects such as rabbits and squirrels, or stimuli such as kids on bikes or skateboards -- not to mention other dogs walking past -- can lead the dog to charge the fence line and get a shock. The dog then associates the shock with the squirrel or other dog or child, and becomes afraid of or aggressive toward them even when outside of the fence.