The customer told staff when he realised he had lost the money, but the £20 was nowhere to be seen.
Prosecutor Ruth Bentley told the court: "Staff checked the CCTV which showed a female pick up the £20 note from a display in the store.
"The manager recognised the woman, who was a regular customer."
The court heard police were called in and Bailey, who lives locally, attended a voluntary interview.
Bailey initially denied taking the money, but admitted it when she was shown the CCTV footage.
Bailey, who has no previous convictions, pleaded guilty to theft and was given a conditional discharge.
Speaking in her defence, Simon Dykes said: "She didn't know who the money belonged to. People don't realise picking up something you have found amounts to a theft. She has been quite naïve in doing so."
Dykes added the matter ought to have been dealt with by a police caution.
Magistrates handed Bailey a six-month conditional discharge, meaning she will face no punishment if she remains out of trouble for the next six months. She must also pay a total of £175 in court costs and charges.
Staffordshire Police Chief Inspector Karen Stevenson, from Stoke South LPT, said the definition of theft was "the dishonest appropriation of property belonging to another with the intention of permanently depriving the other of it".
She said: "We would actively encourage any member of the public who picks up money that has been dropped to be honest and do the right thing by taking all reasonable steps to try and find the owner."