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Wood chips do break down similarly to mulch and will eventually enrich your soil, but they take longer - fresh chips can take a year or two versus a few months for processed mulch. The main downside is that as they decompose, they pull nitrogen from the soil to do it, which can starve your perennials in the short term, though adding a bit of fertilizer when you lay them down fixes that pretty easily. Wood chips also tend to compact and mat down more than shredded mulch, so you'll need to fluff them occasionally to keep water and air moving through. That said, if cost is the deciding factor and you don't mind the extra maintenance, they're absolutely usable for flower beds.

I've used both in my own beds over the years, and the real trick is knowing what you're actually getting. Wood chips from a tree service are basically free or dirt cheap because they're a byproduct, but they're not the same as bagged mulch. The stuff that's already been sitting around for a while breaks down more predictably, whereas fresh chips can actually pull nitrogen from your soil as they decompose - which sounds backwards, but that's what happens when fresh wood is breaking down fast. You'll want to add extra fertilizer if you go that route, especially with perennials that are already established.

The other consideration most people miss is that fresh wood chips can mat down badly when it rains, creating a water-resistant layer that actually keeps moisture away from your plants instead of trapping it. Aged chips don't do this nearly as much. If you're getting free or cheap chips, let them sit in a pile for several months before spreading them, and you'll get much better results. Your perennials will be fine either way, but the prep work makes a real difference.

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