Do not give the npcs more than 10-20 candies.
The chances of being tricked depend on how low you go, but not getting tricked doesn't mean that you will get an amazing prize each time.
I have gotten 1 one-time usable glowstick, jellybeans, gralats, 1 furniture item.
The higher you go, the less chance of being tricked, but don't use up a lot of candy on each npc. 10-20 max (Depending on how much candy you have, I guess)
ALSO, the npcs don't spawn out in specific locations.... so you are stuck having to travel around to find them, they just randomly leave and enter their buildings.