Firstly it was used as a punishment for nagging wives. In those enlightened times, a man could pay for his nagging wife to be dipped into the river on the ducking stool and of course, suffer a degree of public humiliation at the same time. It's unclear where the payment went, but clearly not to charitable causes.

Secondly, it was used as a punishment and public embarrassment for cheating businessmen, who would be ducked into the water in front of a baying crowd and who would inevitably be forced to leave the city afterward, their reputation in tatters.

Lastly, it was most famously used as a litmus test for witches and the way it worked was this: any woman accused of being a witch would be placed in the chair, and the chair would be swung out over the river and then submerged deep in the river for 2-3 minutes. After that time, the poor woman would be brought back to the surface. Now here is the test: if she survived this lengthy ducking then clearly she was a witch as she must have used her powers to survive the fatal dowsing. If so, she would be burned at the stake as a witch. If, however, the lady was dead after being submerged for 3 minutes, then clearly she was not a witch. Her family would receive an apology letter from the Church and could be given a Christian burial and have her soul recommended to God.

Though easily the best outcome, it was death either way for anyone accused of witchcraft!