The school I now work for has a very similiar discipline and reward system compared to my last. When students do homework or accomplish something, you reward them by giving them "smiles" in their "communication journal". When students fill up their communication journal with 50 smiles, they are given e-cash partcipating at a site and allowed to shop for their own gifts.
This system improves on my last school in that collecting the smiles doesn’t become a way of showing off to other students. Several of my students would never spend their "star" points. They used this to make new students feel bad, much like "leveling up" in a game lets you brag about how much time you’ve spent playing. Also, since they could purchase items in front of other students, and there was a limited number of items, students would purchase things just so someone else couldn’t. Allowing students to use rewards to spite others isn’t something you should encourage.
This system, since it is shop at home friendly, won’t prevent people from bragging about smiles, but will prevent spite purchasing. It’s not perfect though, as some of the rewards are nearly impossible to reach. I’m not joking when I say the site’s name is "Lemons". I worked out the exchange rate from the rewards at school. If the average students gets five "smiles" in a week, when converted to e-currency to save up for a PlayStation Portable, it will only take approximately 25 years to reach their goal.
Ironically, the same person thinking they could achieve that goal probably spends the same amount on English education in a few months, if not less. Of course, the whole point is to let the kids choose their own rewards to work for, and let them get the experience of shopping online as soon as possible. I think it’s a cool system as long as you were going to study and get the rewards anyway. The only danger is that students set unrealistic goals for themselves, and I can already tell that a lot of parents at the school might have that problem.