We put the tooth under their pillow, sometimes in a small bag. It's easier to find in the dark. We pay $1. Sometimes $2 and/or a small gift if the tooth had to be pulled by the dentist (for pain and suffering). My son always preferred money. My daughter, age 9, just found out the truth about the tooth fairy. She would rather receive a small, dollar store gift than money. I know some people are against the tooth fairy, easter bunny and Santa Claus but if you do go for it, keep the fantasy up for as long as you can. The kids love it. "Those who believe, receive" is a great motto for extending it as long as possible. It also helps the older child to keep the secret. After a while the kids are just humoring you but it is fun for everyone.