Unable to trade in working iPhone because of IMEI problem

We have been AT&T wireless customers for many, many years. I recently upgraded our family plan, including buying a new phone and trading in a 2 year old working iPhone 7Plus. When the AT&T store employee processed the trade-in of the working phone, they said that the phone is blacklisted and cannot process the trade-in. Then they told me the phone is not blacklisted because we have had it and was using it for the past two years, that there is a glitch in the system. After many days and hours of frustration, I am left with a broken agreement that we could trade in our working phone because the "system" is incorrectly preventing the trade in. I called the Loyalty department and they initiated a case. I am not confident that they can solve the problem. If AT&T knows the phone is not blacklisted, then who can over ride the broken system to allow me to trade in the working phone? Right now I am sorry I stayed with AT&T with so many other options available. My level of trust is very low with AT&T. It feels like "bait and switch".