Open Ground Outlets. Am I Grounded?
Electrical grounding is a whole course unto itself, but there is one aspect many home owners face: what to do with an outlet that shows "Open Ground" on a socket tester?
The first point is to know what is causing the problem. In the case of a Three Prong Outlet, the wires inside might just be loose. If they aren't, it's possible the wires "downstream" or "upstream" are loose. The next point is in cases of old homes (say 50+ years old) there may be no grounding wire. That means even though an outlet has 3 prongs/holes, the bottom one has no connection to it.
In all these cases, you can turn off power at the circuit breaker, confirm it is off at the outlet using a tester, and proceed to remove the cover and outlet from the wall. Inside there will be 2 or 3 wires. If there are 4-6 it connects to other outlets as well (hopefully colored black for hot, white for neutral, and green for ground). A grounding wire should be exposed copper or have a green sheathing. If there isn't one, then we have some interesting problems to fix.
The best thing to do is hire an electrician! But enterprising home owners, doing plenty of research, can fix an open ground outlet problem in an older home.
Keep in mind, one adequate solution to grounding an old outlet can mean a DEFECTIVE electrical note in a home inspection report; even though it satisfies code requirements! It's an easy fix too.
Some homeowners, even electricians, may not want to run new grounding wires. So instead, they replace an upstream outlet or circuit breaker with a GFCI (or a combination GFCI/AFCI). If this is done, the typical socket tester home inspectors use will NOT trip the GFCI! For technical reasons, the socket tester needs a grounding wire. The solution: add a label to the outlet: "No Ground" This is required not because the outlet is a fire hazard, but because it tells the inspector your tester won't work even though the wiring is actually safe. That little label can prevent an inspection contingency FAIL.
Great video resource on grounding old outlets, and codes: