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Toddlers in the 18-24 month old range are sometimes guilty of biting at daycare or nursery, or may bite their parents. This is a normal developmental phase for some toddlers; they really do not understand what pain they are causing. They often laugh at the reaction that the parent gives when bitten, not out of spite but out of amusement at Mommy's funny face. This of course just reinforces the behavior.
Biting at home is best handled by a firm "NO." Immediately take the child by the shoulders, look him in the eye, and say "No! No biting!"- and then preferably place him in a preappointed time out area for one or two minutes. Eventually he will get the message. If you pay close attention to him, you'll start to notice those situations that trigger the biting episode - it is usually some frustration or anger that brings on the biting response in the child. Try to watch out for these situations and intervene promptly.
Biting can lead to real problems when the child is threatened with expulsion from the daycare if the parents don't "do something about it." Understand that everyone is frustrated in this sort of situation: you, because you are not there and cannot interrupt the biting; the parents of the bitten child or children, understandably; the daycare personnel, who probably are trying their best to keep little Johnny entertained and supervised but cannot be watching him 100% of the time no matter how good they are. If your child is expelled from daycare, fine - get another one. Ordinarily, this is not a problem that should stump trained daycare personnel (although, admittedly, I don't know your child ;-). If they can't handle it, you may have been in an overcrowed or understaffed facility - the caregivers either didn't know what to do or they were too busy to notice the situation arising. Maybe not; the care staff may indeed know what to do, may really be trying - and still your child bites. Perhaps just being in another group of kids will stop the situation. It does seem that biters usually pick on one preferred victim, who tends to be younger or more passive. You might suggest a change of room or care group - perhaps try your child in with some older toddlers.
Certainly, do not waste your time or make yourself look foolish by giving your little toddler lectures about how biting is not nice, or he will get germs, or whatever. He's just incapable of understanding and rationally responding to argument and persuasion.
And ignore helpful friends and inlaws who advise biting him back. He isn't capable of understanding why you would do such a thing to him. He can't connect his bite and your retaliation and draw a moral lesson. He's just two years old, for goodness sake.