Should we refund the deposit?

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?

Thank you

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.

Yes, just refund it.

You are going to waste more time and energy fighting it on top of a customer who is likely to be even more unhappy (and probably vocal about it), for $210 it simply isn't worth it. Chalk it up to experience and put the clause in your contract.

In this, yes, you should just refund the deposit.
Even on a ramen budget, $210 is not a big deal, and keeping 1/2 of that is even less of a big deal.

Use this as a slightly-expensive learning experience and update your contracts and clauses.

"Client agrees to pay 1/3 of total up-front as a non-refundable retainer. Initial funds cover the costs of creating sketches, mockups, and representative examples of anticipated finished works, and therefore is not able to be refunded should Client choose to terminate contract before final completion of the project."

Or, something like that, IANAL.

Do yo have a written contract with this client? If so, what does the contract say about refunds?

If you do not have a written contract, refund his money and get a contract that your clients must sign before you start any further new projects. Misunderstandings are easier to avoid when everything is spelled out, in writing, in advance.

This is a no-brainer. Give a full refund, thank them for their patience and apologise for not being able to help on this occasion.

I am not impressed with the idea of a weasel-clause to say deposit is non-refundable, as suggested by some. This is not good practice and any work done on refunded projects is just "cost of sales".