That's so odd. If the s/n checks out on the website, it's hard to imagine why the store wouldn't trade it in. I agree, if it's convenient, try again in a few days, and if there's a problem, get them to explain it. You probably know this, but you can keep the band, charging cable and wall wart when you trade it in to Apple.
Yes, thank you. I was aware. Part of the reason I was planning on just trading it in vs. just selling it on my own. I don't want to have to give up one of the bands, the charging cable, etc. I'll for sure have to stop and get more answers.