To recap this is how I did it –
I went to the AT&T store that I purchased it from and told them that I wanted the credit. The girl asked the manager that was helping someone else and he told her to send him and email with my info and that he would process the credit manually later that day. I asked why I could not get cash for it and he stated that they do not price match on phones but since this is the iPhone that they are making an exception.
I did not argue but ask for a copy of the email. The girl printed me a copy and I made my way out of the store.
I really have to give props to AT&T for that especially since it had technically been 15 day since I had bought it.
With that I actually got 2 4GB iPhones for $300 each. I know a lot of people said that the 4GB version is not worth it because it only has 4GB but I have not felt limited by it.
I hope that if you are trying to get your refund that you are successful.