It seems to me that there is very little knowledge about thievery among the posters in this particular thread...
First off, There are plenty of people, both now and in the past, who "work" like this, picking pockets and running street scams, for years without getting caught. The fact is that these people are "professionals" in their own right, and they are very good at what they do. And in order to do their "job" without getting caught, they not only need to know how to steal, but also who to steal from. A pickpocket can tell a tourist from a native at a glance, probably knows approximately how much money they're carrying and where they're carrying it, and can assess what sort of risk it would be to pickpocket this person (whether they would notice, whether the money is accessible, etc.). And when an experienced pickpocket finds a good mark, you will be absolutely astounded by what they can do. Stealing watches, wallets, glasses (from a shirt pocket), and even TIES (I have seen a person steal a tie right from someone's neck...and this person was being observed by 3 friends at the time, and they were at a dog track (which is a place where people probably ought to be more aware of these sorts of things to begin with)). There are some very simple precautions one can take to prevent themselves from being pickpocketed, but a pickpocket will undoubtedly be able to find someone with their guard down, and this is the person that they will try to steal from, not from the man with his hands in his pockets and his eyes darting about every which way.
Now, of course, magic does change many of these things. However, we must realize that not everyone can afford such magical protections, and if they can, then it is likely that there is a magical counterpart that a thief can use (arcane sight can spot spellcasters, detect magic can find abjured or glamered pouches). And don't forget that many spells do not have permanent durations, so unless there is a dedicated mage working in the service of the mark then it may be likely that their magical protections have worn off or were set off by accident and the person hasn't had the time and/or disposable income to renew them yet (and that's another thing...it's likely that, if all these magic mouthed bags are so common, they go off so often that people tend to ignore them...when you hear a car alarm, are you actually worried that said car is getting stolen? I very much doubt it).
Even if a thief is caught, they are also often good at fast-talking their way our of things, or they have a set escape route or are working with a partner or multiple partners that can help them in the case of a mishap...a couple kids (or halfling thieves, disguised as kids...) running in and helping to cause confusion can be a nice diversion while you run to the nearby confusing alleyway that just happens to be right next to where youve been working all day.
I'm sure there is more to be said, and I could go on for a long while about this, but I think that just about every remedy that has been given in this thread so far is just going well beyond too far...let the thieves do their thing, it's what they do and what they're trained at and supposed to excel at, they don't get a lot of money from it (well, they can if they do it right ;-) ...but that's not going to happen incredibly often), and there can be incredible RP and adventure opportunities based on a thief's greed/jobs/aftermath (I've had many a memorable adventures that started with a thief or con artist character of mine just simply doing their thing, and eventually the whole party ended up getting into something neat because of it). If you really need a solution use the thieves' guild, but I think if the player/character is creative and thoughtful about what they're doing they they don't need to be stopped...the point of having a skill-based class is that they can use their skills sometimes, and you shouldn't stop them from doing so.
*I should mention that after looking at the linked-to guidelines for pickpocketing in waterdeep, they do look alright and although I wouldn't implement them in my campaign (I prefer to play it by ear, it makes it more interesting), if you want a simple, no-work solution then I would agree with using that system, possibly with a few changes as I only took a cursory glance at it, but it seems alright.