Have a clean quart-sized glass jar ready.
Cut the stem end of the mini bell peppers off. Remove seeds and large ribs by rotating a paring knife inside the pepper. The peppers should remain intact.
Cut each pepper into rings, ¼-inch thick.
Peel the shallots and cut into ¼-inch slices. Separate the slices into individual shallot rings.
Add the pepper and shallot rings, and the sliced garlic into the jar.
In a small saucepan, add the white balsamic vinegar, water, sugar, fennel seeds, mustard seeds, black peppercorns, red pepper flakes, and salt.
With medium heat, bring the vinegar mix to a gentle simmer. You should see little bubbles along the sides of the pan.
Simmer for 10 minutes.
Pour the hot vinegar into the glass jar, over the peppers and shallots.
Let the pickled peppers come to room temperature, for about 15 minutes. The peppers will start to get softer and collapse a little in the jar.
Use the pickled peppers as a condiment for sandwiches or burgers. You can add them to salads for a little zest. Eat them as a snack.