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Variant of the once-popular "hugs, not drugs", this expression extols the virtues of giving someone semi-intimate affection as a "reward" or "payment" for physical/financial/material assistance or other favor that the person does for you, rather than just shamelessly begging to have said assistance given to you for free.
Tiffany didn't have gas-money for a ride to pick up a cartful of groceries at the supermarket, but she insisted on reimbursing me anyway with five minutes of warm-hearted lip-locks and gratitude-filled arms-wrapped-around shoulder-blade scrunchies after we got back to her house again --- she knows da value of a dollar and a friend's time/effort, and so she dedicatedly maintains a "smooches, not mooches" policy.
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To ask for free "lip-service" at a kissing booth.
Da term "smooch-mooch" could also refer to da act of offering to suck face with someone in exchange for his providing something dat said affectionate-gesture-offerer really should pay said prospective helper for.