Explination on how Leo did it...
He used a street performer's trick to distract the Merchant. The way it works is you keep the Merchant's focus on one item. Usually with quick flowing movements, or an interesting object or promise. While he did that, his other hand was free to pull change from him with that arm drop he did.
So... what he basically did was he used the Merchant's own money to pay for the gems... and got change back.