HELP with DD's SCRATCHING!

[azzeps]

My almost 3 yo DD scratches Daddy and Grandma (her caregiver 3 days/week) when she gets upset, or even sometimes for no apparent reason.  I really don't know how we should be handling this.  We have tried, "Ouch, that hurts!" and "We don't scratch" and "If you feel like scratching, scratch this pillow" and my husband tonight at dinner after another scratching episode said he was just going to spank her.  It makes him SO angry and hurt when she does it.  And a lot of times, I can't pinpoint the reason why she's doing it.  Last night she woke up and he went to get her and bring her to our bed, and she scratched him then.  Just random.  I don't know what to tell him to do or not do.  Obviously it doesn't make sense to spank her, but he also tells her, "If you scratch me again, you won't get any bed time stories," which, if actually enforced, leads to howling and hysterics at bedtime, and then explain to me exactly how we are supposed to get her to sleep????  I don't know what to do.  My mom has sort of taken the "ignore it" approach.  She will say something but doesn't make a big deal about it, I guess, from what she's told me.  Should we start giving her a timeout if she scratches? We never have used that method before, but this seems to be getting extreme and I don't like that my DH is being used as a punching bag.  She has only scratched me once that I can recall, so I really don't have any good tactics or approaches for DH.  Does anyone have any suggestions please?  Thank you.