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We have corresponded with Paypal's customer service, they looked into it and responded with the info below. It appears default information from the paypal buttons (that we've used for 10 years with little to no problem) changed somehow and are sending paypal a default shipping charge of $0.00. (see details below my signature)
Can you guys please help us figure out what we need to do. We are losing money and customers by the minute as they either abandon the cart confused or check out with free shipping on very large, heavy items.
“I have reviewed their website and captured the data being sent to PayPal for the Buy Now links they have on their site. I tested a few different items, including one that did have shipping done a few days ago, and they are including the variable shipping=0.00. This variable causes us to ignore the profile shipping as the cart is telling us to not charge shipping. I am not sure if the merchant's cart made a change on the 18th or if it was something on PayPal reading it differently, but this is expected behavior when shipping=0.00 is sent. The issue is on their cart side. Since they are telling us to charge $0.00 shipping, we do not display any shipping options.
In order for profile shipping to trigger, the following situation must be true:
1) Merchant has set up shipping profiles
2) Buyer address must match a shipping profile
3) Merchant must not send a shipping value.
4) Merchant must either not send no_shipping or have value set to 0 or 2.
Since merchant is sending a shipping value, it overrides the shipping profile within PayPal.”