I would like to offer $1.50 flat rate postage for orders under $10, and free shipping for orders over $10. I already do this in practice, but I have to manually adjust invoices for orders under $10, or give postage refunds.

The free shipping for $10 orders is already in place. I can't figure out how to offer $1.50 flat rate for orders under $10. I set my items at $1.50 postage with $0 for additional items on each individual listing, but the problem is when someone buys several different items from my store (but under $10 total). eBay sums the postage in this case.

Under Account > Preferences > Combined Payments and Postage Discounts (which is where I set up the free postage rule), I'm looking at the Flat Postage Rule link. I choose "Add an amount for each additional item" and set the amount to $0.00. But it's not working. The second screen confirms the rule as "Charge the highest postage cost and add AU $0.00 for each additional item" but eBay is summing the postage at Checkout. So if someone buys 3 of the same item, the postage is $1.50, but if they buy 3 different items, they get charged $4.50 postage.