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I've run into this problem where I can't create shipping labels. A message pops up saying, "PayPal Shipping is not available. We apologize for the inconvenience." My account isn't fully verified, however it was fine before. I've tried contacting Paypal, but i never got an answer.
Account verification should not affect printing shipping labels. It's probably something going on with the system. Before you try again, it's always a good idea to delete your web browser's history, temp files and cookies, close the browser, then reopen it and login and retry. Gives a clean start.