I traded in my 1st generation Ipad 16 GB Wifi this afternoon, and received a $200 trade in card which I just realized is not the same thing as a Target gift card. I got the last trade in card at my local Target and there were several people in line behind me who were pretty frustrated about them running out. I would call your local Target first to see if they are still offering the trade in.
I just tried buying an Ipad Air on the Target website since they are out of stock in the store, but the website wouldn't accept the trade in card as a gift card. You need to use it as a credit card, but the problem is, you can only apply one credit card for each purchase. Therefore, you can only purchase something that costs $200 or less with the trade in card on the website.
My options are to wait until the product is back in stock at a local Target, or I'm going to try and purchase a regular Target gift card with the trade in card. That way I can use the gift card for an online purchase and pay the remaining balance with a credit card. Just thought I'd share in case anyone plans to trade in their old Ipad and needs a replacement right away. It looks like you may need to jump through a few hoops unless your local Target store has the model you want in stock.