If she does not look like one of the hairless/nearly hairless/flat-coated breeds I'm going to list below, she could have mange or some other skin condition that is causing her to lose her fur. Since she has fur on her paws, it makes a skin condition sound more likely.
(Sphynxes are usually entirely hairless, but some may have a light peachfuzz covering them)
Rex cats have curly fur, but it can also be very thin - some Rex cats look nearly hairless. Most Sphynx cats are entirely hairless, or have very fine peachfuzz.
As for microchips - my cat was microchipped at the base of her neck, right between the shoulder blades. I can feel it if I rub that area - it's tiny, about the size of a grain of rice. But, she was microchipped 14 years ago, so the process/location of implantation may be a little different now.
As others have said, a vet will have a device that will detect and read a microchip immediately, even if it has migrated from the implantation site. Most vets won't ask questions or charge you, and will simply scan the kitty if you bring it in and say you found it as a stray.
Your son should also put up "Found Cat" posters in the area where he lives, and think about posting on Craigslist or other online sites (like the online Classified section of the local newspaper) if he's serious about trying to find out if the kitty has an owner. Always omit a special detail about the cat when doing something like this, so you can actually get serious inquiries. For example, if the kitty has an unusual marking on one paw or somewhere, ask any callers to describe the markings to ensure it's their cat.
When I found a stray cat hanging around my home, I went to my local wireless phone store and picked up a cheap "burner" cellphone to use as a contact when I posted on Craigslist and made Found Cat posters. This way, I did not endanger my personal cellphone number.
Keep us updated! :}