Omg..this is so cute I wanted to share right away. This idea comes from Jess of Lost Button Studio.
When it is time for a tooth fairy visit at your house, instead of doing the tooth under the pillow thing, add some magical mystery with the tooth fairy jar. Use a glass jar and fill about 3/4 way with water. Then have your child drop in their tooth. When your child wakes up in the morning they will see the jar now filled with a beautiful colored water (few food coloring drops added in by mom or dad), and some magical glitter floating inside as well! Tooth will be gone of course, replaced with some shiny coins.
Jess has many more cute ideas on her blog so go check it out!