<xsl:for-each select="$transactions/transactions//transaction/items" 
                                                ^^
                   it's very inefficient to have // here but without
                   seeing your source can't suggest anything else.
                   perhaps just / ?

 <xsl:variable name="thePerson" select="../customer/name"/>
   <xsl:variable name="email" select="../customer/email"/>
   <xsl:variable name="msg" select="item"/>

David

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