Parents on Tyneside whose children attend school regularly are being rewarded with almost £4,000 worth of cut-price holidays.
So far 118 trips have been booked under the scheme, with North Tyneside Council bosses hailing a reduction in truancy.
Those who receive vouchers get a 10% reduction on a holiday through a local travel agent.
Parents who are known to allow youngsters to truant still face prosecution and big fines.
Permanent exclusions
But the council says the combination of threats of legal action and holiday rewards has resulted in fewer incidents of truancy and fewer exclusions.
There have been just six permanent exclusions in the borough this year - an 89% reduction over the past five years.
Norma Redfearn, cabinet member for children, young people and learning, said: "The holiday voucher scheme is reinforcing our stance by reminding parents that children should not be taken out of schools for holidays during term time, by providing the voucher incentive."
Ms Redfearn added: "In the first six months of the scheme 118 people have taken advantage of the scheme and benefited from discounts worth nearly £4,000."
The scheme, which was rolled out last September, follows similar projects in Scotland and County Durham.