Never heard of this, but definitely return it for the right device as bsweet suggested.. But I have read where some people ordered a 32GB version and received one that had 16GB internal plus a 16GB microSD card..
It's supposed to be all internal memory, either 16GB or 32GB. But I have read where some people ordered a 32GB version and received one that had 16GB internal plus a 16GB microSD card. Verizon tried to pass this off as being acceptable (I think it was just their way of dealing with the initial 32GB shortage), but it's not in the slightest. If you receive one of those, many people have successfully been able to return it for one that has 32GB of internal memory.
If you install a lot of large apps (particularly games), and you don't like to root, the 32GB model would be preferable since you can't move apps to the SD card natively on the S3 (and on several other recent Android phones). But if you like to have a lot of room for music, videos, pictures, and other personal files, and don't install a lot of apps that take up a ton of space, getting the 16GB and putting that $50 towards a 64GB microSD card would be the way to go.
ACK!! I wish I'd seen this before I got my phone! The lady at the Verizon store convinced me that I was insane (I really felt like a total idiot by the time she was done) and that they didn't make a 32 GB model, that all of them were 16 GB + the 16 GB SD cards. Now I've spent all weekend customizing and falling in love with my phone, and I feel like I have to return it on principle now At least they didn't con me into $50 on the 16 GB card so I have a little dignity left... though I have to buy a new screen protector now... Ack I say!!