Hi Kim,
I've tried to reproduce this, but there isn't an option to automatically put a capital at the start of a word(short of making a variable expression with the PROPER function).
If you didn't use the PROPER function, then it must be something else. Is the variable part of a paragraph that you copy-pasted from Word by any chances? When you copy-paste something from Word, some auto-formatting settings can also be copied, as PSM and Word share some of their libraries. You won't be able to control them from PrintShop Mail, but they will be there, and they might behave just like they did in Word. So that could be the case here. To check that, create a new text box, and manually type the paragraph, then put the variable and see if it still puts it in capital letter. If not, then that could be the issue.
Regards,
Raphaël Lalonde Lefebvre