Never buy a dog from a pet store: the majority come from the puppy mill industry. There are a few decent stores that obtain puppies through reputable breeders, but these are the extreme minority, and you never really know what you are dealing with. The shelters are overflowing with well-behaved, healthy, dogs and cats in need of good homes. 9 out of 10 puppies in stores come from a puppy mill, whether the facility is licensed or unlicensed.
Animals in puppy mills live in small wire cages stacked one on top of the other, usually four to five cages high. Many dogs have open sores, and bald spots from lying on metal wire. Excrement drops from the higher cages directly into the cages below and either falls on the dogs or into thier food. Many dogs have no water, and are malnourished. There are cases where a decomposing carcass of a dog in one cage will drip fluids onto the live animals below as it continues to decompose. Often hundreds and hundreds of dogs will be kept in these conditions on one small farm. Sometimes kittens are bred in this manner as well.
The breeding mothers are disposed of after four or five years of constant use. The puppies turned out are agressive, dangerous, distrustful, nearly impossible to train, and very often infected with "kennel cough." Puppies recieve no vaccination- people who buy puppies at high prices often find thier dog dead, or having incurred a great deal of veterinary bills for treating parvovirus, the highly communicable "kennel cough."
Puppy mills are prevalent because of the public market for pedigreed dogs. The American Kennel Club (AKC) officially denounces the practices of puppy mills. On the other hand, they recieve a great deal of money for registering pedigreed dogs, and perpetuate the myth that a purebred is better.
Licensing of facilities began in 1971. Facilities not adhering to the standards of the Animal Welfare Act risk a written warning, or losing their license, but inspections are rare. There appears to be a direct conflict of interest because the USDA arranges licensing, but their responsiblility is also to promote the economic health of the farmer.
In the end, the best thing you can do is to acquire all pets through a shelter, and encourage others to do the same.
The majority of this information was obtained in a Reader's Digest article by William Ecenbarger, entitled: "Scandal Of America's Puppy Mills".
