In the shipping policy section of the seller hub you have to go into each shipping policy you have created. Example I have a few different costs for shipping so I have to change 5 policies. There is an section that says my ebay under time away which is silly but this tab shows your policies. Business, Shipping and Selling preferences. Pick Business policies. Then you will see all your categories for all 3 then page down until you can toggle the local pick up. You can charge a handling fee which I say is $3.00 to pack it up and coordinate and bag? Hope this helps.
