Since Zenimax has not yet added any reaction to what will happen if you steal an item in game, I thought I'd give my idea on it;

When you steal an item in-game, you will get a bounty (which means players will PvP against you) or be attacked by guard NPC's if they see you. When having a bounty, other players will gain extra XP when killing you. These can be from your own faction if you've your bounty is high. If not, you will be taken to a prison if the guards damage you to low health. Prison is basically like in Skyrim; you sleep and that's it. But here's the negative effects; you get a de-buff from questing experience in that area by 5%-, because of your bad reputation for 8 hours.

I don't think the people on your faction should be able to kill you, but maybe beat you up until you're close to death, then any nearby guards can arrest you or take the item back on the spot if it was something like some clothes.

I'm glad they are implementing a crime system despite it having to be a post-launch feature. I think it goes without saying that stealing an item will indeed give you a bounty. I would love to see them develop upon BGS's system and go deeper than just teleporting the player to a cell where they can insta-sleep off their crimes. Instead, I'd rather see a them implement in a nice grinding quest (because those are punishing in the games aren't they? ). They were so close to doing that with Cidhna Mine in Skyrim, it's a forced labour prison camp!

You go to prison, the guards say you need to dig up X amount of ore, or create N pieces of armour, you go to sleep and your time is served.