I get poly bags for less than 10 cents each on Ebay. Amazon has them too. Last time I bought paper "Card" size envelopes in WM they were 10 cents each.
No way would I send fabric in a paper envelope unless it was very small, flat, charms.
It is amazing how much misinformation is floating around the postal world - what a frustrating organization to deal with. This 3/4" rule is WRONG!
I would recommend if your FRE's are refused for being over 3/4", FIGHT IT!! ask to speak to the supervisor, the postmaster, and if necessary talk to the regional customer service reps.
Remember, never accept a "NO" from someone who does not have the power to say "YES".