For a new website, he paid a deposit of $210 (30%). He looked through our porfolio, and got about 1/4 way through before saying "Awesome. Let's start!".
We for him 2 design images and he didn't like them, requesting termination. We sent him a 3rd design nevertheless, but he still didn't like it. We're willing to do another design at no extra cost, citing that based on his reaction to the portfolio we're capable of making designs he likes.
He still requests termination and is asking for his money back. I don't have much of a problem refunding up to 50%, but I do the programming and these were just concept designs. My partner, the designer, is against giving any money back at this point.
Here's my big concern: we don't have a clause in the contract on refunding the deposit. Yes we should, and we will now, but with him we don't.
So should the deposit be refunded?
EDIT - based on the answers here, we're giving the deposit back. We did have a written contract, but we realize that we should define what what mean be 'Deposit' in the contract and clearly go over it during the first meeting. The style we've chosen is:
- If either party terminates before we give them any work, then the deposit is refunded fully
- If either party terminates after getting the concept designs, then they get a 25% refund
- If they terminate after seeing the fully programmed site on our server, no refund is issued (since any designer can just look at the source and in most cases copy the site)
If anyone wants to critique that, we'd appreciate it. Nevertheless, we thank everyone for their answers
EDIT - The above is the policy we're going to adopt, not the one we had. We didn't have anything that covered refunds before.