The Merchandise options tab allows you to set the delivery options and prices for a person who purchases merchandise as an "Optional Item".
 - ensure you have setup an "Optional Item" with the Type of Merchandise first.

You can setup the choices for how the person can receive the merchandise items.
 - Pickup
 - Postage

 Once the details are setup for the Delivery options, this is how it will look on the public registration page.

Pickup - $0

OR Postage - $5

The person can then pick the address they have already registered with, or add another address instead.