I'm having the exact same problem trying to use the small flat rate box. I think Paypal is doing this intentionally because of their greed. If I use a small flat rate box, it will cost me $4.80 with delivery confirmation and like you said, the box is free. Using an envelope for the same shipment, they want $8.80, almost twice as much. You can go to USPS.com and use any of the flat rate boxes. I wanted to use paypal because the addresses will be entered automatically, but I can't, so I will go to USPS. Good luck.
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