Because there is no option for pick up, I have had to create a discount code for those who are ordering my products online but pricing up in person. Because of this they have to act as though they are getting their items shipped. When using PayPal it makes me give them a confirmation that it is shipped, although I cannot give that code because they are picking up. And all over I am not able to receive my money.
I'm Miles from the Social Care team at Shopify.
I can certainly understand having a pickup option can seem a little bit tricky! Thankfully, there are a couple of ways for a "Pick-up in Store" option to be added to your shipping.
One way to do this, would be to create a manual price based rate for free shipping. To do this you would need to go to Settings > Shipping:
You can learn more about price based rates here.
If this isn't suitable for you, we also have some great apps in our Shopify App Store for adding Pick Up options to your checkout. I would suggest Store Pickup + Delivery by Zapiet or Store Pickup Click and Collect by CreativeR.
As for your current issue with PayPal, my best suggestion would be to show the order is fulfilled in your Shopify order screen, and confirm that the customer received the order in person.
Let me know how it goes!