You can make a blueprint which contains a mesh and a collision volume.
In the code of this BP, you make sure that it only accepts input when the player is overlapping the box.
When the player is overlapping, and presses ( interact ), you save in a variable ( in the player ) what the mesh is, and destroy the BP. Play the pickup animation.
( If the player tries to pick something else up, it’s not ok, because the mesh variable is set. )
When the player wants to drop the item, spawn a new BP, set the mesh, and enable physics. Clear the mesh variable. Play the drop animation.
That’s it 