The character capsule component should prevent you from getting into too iffy of a place. The interact collision of the item should be centralized to the actor and mesh and large enough to cover most of the item. With all of these setup I trace from pelvis down for the spawn location. Haven’t run into an issue where I can’t pickup the item again.
Other option is to have UI interaction. Multi-Sphere trace around the player (1.5m from knee height) and list all hit pickup items in the UI. Then click and drag to pickup.