When someone is wearing some fake-ass cheap necklace/chain that the person doing the checking doesn't think is real. You go up to the wearer and pull on the front of the chain or medallion or what have you on the front to see if it falls off because of the horrible quality.
Ray Ray chain checked Jamal when he walked into the club looking like he had purchased his gold chain from the 25 cent machine.
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When you yank on somebody's wallet chain and yell 'CHAIN CHECK'
This ensures that their wallet chain is in good condition and properly doing its job.
Circa 1997 (my 8th grade year, back when me and my little friends wore wallet chains)
I chain checked him and his shitty ass wallet chain straight broke off his beltloop!
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