Ok, I think we have found the problem.

1. As jen suggests, some sellers do not select NO POSTAGE in the drop down first.

2. The iphone app is not allowing pick up items to be listed without showing free postage.

A shipping option needs to be selected then domestic, then local pick up. Free Postage 

appears with an ON and OFF button. This button is not selectable whereas it should be.

So until Apple rectify this, listing Pick Up Only items is best done on a PC.