Yes, they do! In the story, the elf watches over children and reports back to Santa each night about their behavior. However, in real life, elf on the shelfs are often used as a fun and interactive way to get children into the spirit of Christmas. They're often placed in strategic positions around the house, where they can watch children but remain hidden from them. The magic of the elf on the shelf is that children can never be sure if the elf is real or not.