This is indeed interesting.
The problem comes from our view of "US$ are valuable, and i had to work hard for that you little mennace"
What haven't we taught this child?
Well, we see no respect for things given to him/her.
We see no understanding of value for these important pieces of paper.
So, how best to teach this child those things?
I believe your idea is one of the best.
When next at the store, the child says, "Mommy i want this!", and mommy should respond, well, you had some money with which you could have bought that.
exactly my idea. The kid did an idiotic thing that screwed him later down the line. Having to face the consequences of his actions seems like a good punishment. He can't weasel his way out of a situation he created.