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First developed and implemented in the 1960s by pioneers such as Nathan Azrin and Gordon Paul, token reinforcement programs, or token economy systems, are behavioral modification systems that reward individuals with tokens for the completion of target behaviors. Tokens are exchanged later for backup reinforcers. To create a successful token economy, tokens, behaviors, reinforcers, and the ratio of exchange should be identified and understood.

An initial step in creating a token economy is choosing what materials or objects will be used as tokens. Tokens used in a token economy should not be inherently reinforcing, but instead should become reinforcing when paired with a backup reinforcer. Items such as baseball cards or stickers should not be used as tokens. Examples of effective tokens include tickets, holes punched in a card, washers, or checkers. Tokens should be durable, easy to carry, and easily accessible to the instructor. Most importantly, tokens should be given immediately following the individual's execution of a target behavior.

When defining the target behavior, it is important to choose behaviors that are specific, observable, and measurable. Behaviors should be individualized for each student and should be tasks that the student has the basic skills necessary to perform. In the beginning of the program, the criteria for earning a token should be relatively easy (i.e., easier behaviors or fewer occurrences of behavior required), but should gradually become more challenging and require more occurrences of the behavior to earn a token.

Another element central to the token economy is the backup reinforcer. Multiple reinforcers should be offered in exchange for tokens at pre-established criteria. At first, backup reinforcers should be available for token exchange often, and should gradually become less available and harder to earn. Examples of possible reinforcers include items or activities that are naturally occurring in the classroom, such as a favorite classroom job or time to play with a classroom computer game. If a naturally occurring reinforcement is not available or is not reinforcing to the individual, then other options should be introduced into the learning environment, such as Silly Putty or candy. In the school setting, ethical standards dictate that essentials such as meals, communication, clothing, or medical care cannot be used as reinforcement.

The ratio of exchange is the number of tokens that will be required to purchase various reinforcers. This ratio is simply the number of tokens versus the price of items. At first, the ratio should be small, with the price of items gradually increased and the value of tokens gradually decreased. The reinforcers should also be changed frequently. Additionally, the price of essential items should be increased while keeping the price of nonessential items low, thus maintaining the motivation of the learner to earn additional tokens. This prevents satiation and habituation.

The token economy system is one of the most common classroom management systems. Teachers will often provide points or tokens to be exchanged later for rewards. Before introducing the token economy, teachers define the classroom expectations and rules, such as have quiet hands and feet, stay in the area, and listen to the teacher. After children understand the rules of the classroom, the teacher can add earning tokens for following the rules. Children can then redeem the tokens at the treasure chest or classroom store. The ultimate goal should be removal of the rewards and token system. This is accomplished by gradually fading the frequencies of earning tokens and redeeming them at the store. In addition, the amount of tokens required to earn a reward can be increased to make it more difficult to earn the reinforcement. To ensure successful withdrawal, the tokens and rewards should be paired with verbal praise, and the amount of naturally occurring reinforcers should increase while the amount of secondary reinforcers should decrease.

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