Why is it illegal in california to refund money on alcohol?

Answer:
Although I know stores can refuse to give a refund I cannot find any law that says they can't. Maybe it is store policy instead.

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It is not illegal but a matter of policy by most retailers. many clerks, managers, even owners are under this false assumption. Or they lie so they don't give you a refund. BevMo (Beverages and More) for example, encourages customers to "overbuy" for a party, then return unopened products for no questions asked refund.
Call one, you'll see.