Picking Pockets fails if a score above the percentage shown for the level of thief attempting the function is generated.

If the score is 21% or more above the #number# shown, the victim notices the thief's attempt.
The potential victim reduces the thief's chances for success by 5% for every level of experience he or she is above the 3rd, i.e. -5% ot 4th level, etc.
    For example, a high level thief (Master Thief, 12th level) is planning to pick
    the pockets of a M-U he has noticed nearby. The base chance for
    success is 100%, the thief is a half-elf and adds 10% for racial ability; the
    thief also has 18 dexterity ability score, so another 10% is added. This totols
    a nice, safe 120% - can't fail! However, the victim happens to be 12th
    level also, so the subtraction is 9 X -5% = -45%. This brings the chance for
    success down to 75%. A good chance, but if 96% or higher is rolled, the
    thief will be noticed, and . . .
Success gains an item from the victim;
the item is determined at random from a list of possessions unless the exact location of a particular item is known by the thief.

DMG:

Picking Pockets:

Failure allows additional attempts.
The victim might notice
    and allow the thief to opercte anyway in order to track him || her back to the place he or she uses as a HQ.
Up to two attempts at picking a pocket can be made during a round.

Q: In the OA book, both
Table 23 and the description of the
yakuza character class state that the ninja
has the thief ability to pick pockets. Why
are the percentages for this ability not
given on Table 24 with the other thieving
abilities? Since all the percentages for the
other thieving abilities which apply for
the monk, ninja, and yakuza character
classes were altered slightly, I am not sure
whether I can use the PH
figures without risking imbalance.
A: Use the "pick pockets" percentages
given in the PH.
(Polyhedron #32)

<
LTH (Dragon #47, Best of Dragon III)
    How often does a thief pick pockets? I
had a thief progress to 16th level over a
2-year period and in that time he
picked 1 pocket! Picking a pocket is
best done just as an assassin plans a
killing. The 2 acts have a great deal in
common. If you tell a player, “A drunk is
approaching and bumps into you as he
passes,” or some such statement, it will
be obvious to all the players what has
likely occurred. On the other hand if you
allow the thief to pick his/her time of
attack with some real forethought, it will
be very difficult for the victim to realize
when his/her pocket was picked.

To encourage pickpocketing, it is very
wise to have many encounters for the
party in a town. Mention every person
the party passes on the street if the town
is small. In a town with a thousand or
more persons there will be a number of
crowds encountered, or people will be
passed almost every round of movement.
Such situations are a thief’s bread and
butter. A good thief will not attempt to
pick up something if he/she will stand
out. This should be obvious from the victim’s point of VIEW as well. Allow more
experienced thieves, that PCs might run into, to convey this concept (for a price) if your players have not
already caught on to it.

Thieves also enjoy slipping in and out
of camps to pick up things. A sleeping
victim can add as much as 100% to a
thief’s chance of stealing something. A
good thief will try to sneak past an outpost/lookout and get into the sleeping
/drunken camp. A good thief will rarely
kill the guard unless he/she has to.
>