The biggest issue with thievery right now is GOODNESS do they stop caring really quickly. I mean I don't expect them to continue active patrols... but... well
Have you ever played one of those stealth games where if someone spots you they will run to where they saw you last... and if you hide for like... 5 seconds they go "Meh" and go back to where they were as if nothing happened?
Yeah this game is exactly like that.
I know this isn't about you, but I don't think (unless the item is extremely valuable) someone is going to spend the next hour or whatever searching for an item that 'got lost'. Sometimes people are forgetful. Sometimes people just don't really care. Sometimes people will kill you because you picked up that knife. But... most of these simulations are actually based on real life. A guard, well, has to guard his post. Leaving that post to go investigate something leaves his post open to further intrusion.
Adding a negative modifier to any interactions with said merchant, regardless of if he knows you did it or not, would probably be the best way to go as it's more grounded in reality and would account for the NPC being 'more vigilant' or 'distrustful' of you or others.