No, the Apple store employees aren’t getting drunk at the Genius Bar; but they might replace your damaged iPhone 4 with an iPhone 4S. Some Apple Store will replace your white 16GB iPhone 4 with a white 16GB iPhone 4S because they have been running out of white 16GB iPhone 4.
“Apple has notified Apple Store Genius Bars that inventory of white iPhone 4 16GB replacements units is heavily constrained, and until further notice, stores lacking white iPhone 4 16GB replacements units should upgrade customers seeking a replacement phone to an iPhone 4S’, reports 9to5mac. This is only affecting Genius Bars in US and Canada.
A refurbished white 16GB iPhone 4S will be given for replacement, not a brand new unit. That’s still a good deal, refurbished units are like brand new — just that you won’t receive original box.