The merchant item wand is used in conjunction with User Placeable chests. It is available from Root of Nine.
After you have placed a chest, you use the wand firstly on any container in your inventory. Then use the wand on any chest you have placed.
This then clones all items in that container into the chest. The items are safe from being stolen and any attempt to steal from the chest will simply destroy the cloned item. You can then reset what is on display by using the wand again.
Note: Using the Placeable Control Wand on a chest with items in it to rotate or move it, will result in its inventory being wiped, so you will then have to reset the items on display. Again, the items in your inventory are safe, the items on display are clones, so do not affect the original items.