my 2 cents l been a woodworker for over 25 years if the chips are shallow you can sand them but you have to sand a much larger area than the chips if the area is say 3"x3" you should probably sand 3"-4" on ether side of the chips and feather the area into the surrounding wood rather than just sanding the chipped area ideally you should sand the whole board The putty will surtainly fill and level out the chips but instead of the chips showing you just have the filler now,filler is no replacement for the wood even if you get the colour right the sun will bleach the stain out of the filler and in 6 months have a mess, boils down to what kind of a job you want sounds to me like a profesional job Then after sanding and it doesnt look right replace the board