For people who weren't necessarily good at saving money, it might prove to be an effective savings technique ("Oh $50, just in time to pay the water bill!') rather than a disincentive. You need to lose the money, even if it's just to your wife to spend on shoes.
Have heard of it before so I suspect it's already been done at some level though I think it related to longer-term goals (e.g., quit smoking by date x or lose your 'bond' to some nutbag political org).
