LOL! Well, this sure sounds like fun! I love a good kiddie prank! I've never heard of the Elf on the Shelf and if I had small children, I certainly would LOVE to play!!
The closest I've ever come to something even remotely close to this was when my son was a babe and I was trying to get him to give up the baby bottles! I devised an idea. My son was born Christmas Eve and was a BIG TIME MILK DRINKER! Man, that kid would go through 4 or 5 bottles a NIGHT and I'd find them all over the bedroom floor in the morning, LOL. I decided it was time for him to drink from a big-boy cup. Well, I had a conversation with my boy about Santa Claus and if he really enjoyed all the wonderful things that Santa brings for him at Christmas. Of course, he agreed that he loved new toys. I told him that in order for Santa to MAKE these new toys all year round and bring them to all the children of the world, Santa needed certain materials. At this point, I opened the kitchen cabinet where I kept all of his baby bottles, caps, rings, etc. I showed him and I said, "Santa needs your ba-bas to make all of those great toys." LOL!!! He stood there shocked at first. So I told him, "Mike, are you willing to give up your ba-bas this Christmas so Santa can make you and other children toys in his workshop?" I told him he was a big boy now and didn't need any baby stuff anymore. It WORKED! My son gave up those bottles in a flash! That night after bedtime, those bottles disappeared (thanks to Mama Elf) and we lived happily ever after drinking from a cup, LOL!! Next morning, he wanted to see what was in the cabinet. I opened it and he saw a big empty space. I told him Santa's Elves came last night and took the bottles away and that he could expect some great new toys on his birthday and Christmas Day. Haha! MAN! I had to do some creative stuff with my son but, if it worked, no harm done!