Refund Policy Advice?

[jakejynx.livejournal.com]

Question to all: What is your refund policy?

We've always held the policy that the deposit is non-refundable except under extreme circumstances (you know, at our discretion). And while I typically had it in mind that smaller items requiring full payment upfront were also non-refundable, I just noticed that it's not explicitly stated in our TOS. x) When you have someone wanting to cancel a paid commission out of the blue for no real reason (they just "don't want it anymore") what do you do?

Is it a good idea to make payments non-refundable, even if work has not started yet (except, again, in extreme circumstances)?