Something to think about...
This is purely a matter of import to me and my family, but it's something to think about as parents to decide what message you are sending. With our children, we have decided NOT to teach our children that Santa is a vindictive person who sends a spy to decide whether or not you get a present as a reward. Instead, we say that we think Santa gives presents for the same reason that anyone else does-- out of love. Santa loves children in particular. As our children get older and stop believing one by one, we plan to admit that parents are Santa but coach them in becoming Santas themselves by finding a way to share a giving love with someone.
Elf on the Shelf could be altered to fit in with this idea, but at its essence, it's not compatible. Most parents that I know that use an Elf on the Shelf also use it for behavior control. This might be effective in the short-term but the "be good for a Christmas gift reward from Santa" does NOT work well in the long-term. Instead, there are sound reasons to consider using different parenting practices for behavior.
Sidenote: I have told our children that when adults say things like "Have you been naughty or nice?" or "Santa's watching," that they are joking to see if they know the truth. I've instructed them to respond "Santa gives presents because he loves children!" They are also instructed not to argue with other kids who think their elf is real. My kid won't be ruining someone else's belief in Santa, don't worry-- but by the same token, I'm not going to let someone else's stupid Elf on the Shelf ruin MY kid's belief in a NICER Santa! :)
P.S. I marked "too much consumerism" because this is a completely unnecessary item, and also because it encourages a reward mentality about Santa. I.e. If I'm good ENOUGH, I can get a really BIG gift. That sort of thinking is built-in. But if you know Santa gives gifts out of love, that automatically changes the expectations and manners a bit about receiving a gift.