I think it is vindictive to sell the dolls, and achieves nothing. She may be humbled but she won't be sorry, just angry.
There must be more constructive ways to get your children on your side. Remember there are many many ways she can go on "lying" and "cheating" if she chooses to - why would you want her to hate you so much that she becomes even more underhand?
I think this is a horrible thread...so many parents remind me of the adults in the opening scenes of Jane Eyre.
Why not ban use of the computer and electronic media for a while. And get her to help you do the shopping for food etc for a week so she can see what things in RL cost; I mean that in a constructive way not a vengeful way. Chores helpful ones, not just breaking stones sort of punishment.
I think many many mumsnetters have had this issue with their children getting so addicted that they spend too much. She is only 10. Haven't you ever in your whole life ended up making an extravagant purchase. It's not YOUR money, it is money for the whole family - I think it is weird to say she is stealing, no if anything she is stealing from herself/her family not you personally.
My neighbour's daughter died recently - she was 11. I should think her mother in your position would have looked back and thought what a unhappy memory I created, and how little that 266 £ (or whatever it was) really mattered compared to her relationship with her precious irreplaceable child.
and please find a bit of peace here and don't listen to these harpies.