Thanks all for you feedback and comments I will take them all into consideration if offering this type postage again.

Don;t think I will thought will just increase the postage to the Parcel rate.

Not sure if it's been suggested already, but why not have 2 different listings? One new without tags that go flat packed for the cheaper rate and the other new with tags at parcel rate for those that prefer them with the tag still on. That way buyers have a choice and there should be no more mix ups.

I had the same dilemma recently with a different product (I didn't receive a negative, but the item in question wouldn't fit through the letter gauge in its packaging, but would fit through without it).

I opted to go for "subsidised" postage (put part of the amount of the postage in the item price, so then the postage cost doesn't look so steep). Also offered a combined postage discount.

You could also opt to sell more socks in one listing to make the postage more economical.

Tippy's plan is not a bad one, but everything I sell is new and in packaging so I think having a listing where it ISN'T would confuse my buyers, because there is that expectation. We know many buyers don't read descriptions. They just see the cheaper postage price and off they go (at least you could have the negative removed under Tippy's plan, though).