Warm a clothes iron to a low steam-free setting, or a setting indicated by the leather repair kit manufacturer's directions, which may vary by brand.
Press down on the damaged area, comparing it to other areas of the chair arm to determine if the arm needs more filling inside. If so, cut a piece of fabric batting and stuff it through the tear using a toothpick or skewer to align the batting under the hole. If the amount of batting needed is minimal or if you have no batting, use cotton balls instead, first stretching them out to flatten and reshape them. Skip this step if the damage is a puncture or a cracked finish without rips.
Cut an iron-on patch so it is at least 1/2 inch larger in all directions than the tear. Slide the patch into the hole face-down, sticky-side up, positioning it with a toothpick or skewer until it completely spans the underside of the torn area. A piece of sturdy fabric such as canvas may be used in place of a patch; the material provides strength beneath a tear. Skip this step if the hole is a puncture or if the damage is simply a cracked finish.
Mix the leather repair liquid with one or more of the tints included in the kit in the empty container that's in the kit, until you achieve a shade that matches the chair arm. Some kits have a color-mixing chart that makes the process easier.
Apply the tinted repair solution to the tear, puncture or cracked finish using the spatula tool from the repair kit, working in thin layers. Smooth the substance over the damage as if icing a cake, extending the liquid a bit beyond the actual damage to feather it into the non-damaged finish.
Place a piece of leather grain paper from the repair kit texture-side down over the repaired area. Iron the paper for 10 seconds or so, or as recommended by the repair kit instructions, which may vary by brand. Allow the paper to cool for several minutes, then peel away the grain paper.