When you light a fire in your fireplace, the gases from the burning fuel mix with the air in the room. The chimney serves as a conduit for these gases and smoke to exit the house. An open damper creates a draft that draws the gases and smoke upward. A chimney with fewer obstructions -- such as masonry angles, smoke shelves and lower dampers -- will create a strong draft. A chimney with a strong draft is very efficient at exhausting the gases and smoke from a fire.
The damper on your fireplace should be open before building a fire. The damper chain is usually wrapped around a cleat or bracket installed at the front interior of the lower chimney to hold the damper firmly closed. The chain should be released from the wall cleat or bracket to open the damper. The chain will be drawn part way up the chimney when it is released.
A great deal of heat is lost through the chimney when the damper is left open with no fire burning in the fireplace. The damper is closed by pulling the chain down through the interior of the chimney, and winding it tightly around the wall cleat or bracket. Not securing the chain will cause the damper to reopen. Firmly anchoring the damper closed will minimize any heat loss when the fireplace is not in use.
It is easy to forget whether you have closed the fireplace damper. You can check this by looking up the chimney when there is no fire present. You should be able to see some part of the sky if the damper is open. However, not all chimneys have an unobstructed view of the sky. The smoke from a lit piece of incense placed in the fireplace should draw straight up the chimney if the damper is open. A yearly chimney cleaning should also prevent soot build-up on the damper which can prevent it from opening.