I am a new daycare provider and have been holding a spot for a (not too close) friend of my husband for months before I opened. DCM and I have been talking regularly while we were both on maternity leave, had a couple of playdates with our babies, etc.

DCG was supposed to start with me on March 4th.

In November I emailed DCM to ensure they were still interested in my daycare. I received a response that they were 100% still interested. I explained at the time that I had already turned at least five potential clients away for the spot that they wanted.

In January I insisted on a 2 week deposit (which they gave me), provided them with my policies and procedures and contract (which they never signed and returned to me).

In January I also interviewed another family with a 12 month old who wanted to start 2 weeks after this other DCG. They wanted me and I wanted them, but because I am new to the daycare field I wasn't sure that I could meet the needs of two 12 month olds in addition to my current kids. So, I told this other family that I couldn't take their baby.

On Friday, 2 weeks before they were to start, DCM called me to say that she has found other arrangements and no longer needs me. She then asked for her deposit back.

My contract states that my deposit is non-refundable and is to be used towards the last two weeks of care.

This is my first time having to deal with this, and I dont think I should have to refund her deposit. They are giving me two weeks notice for a spot that could take months to fill, not to mention the fact that I had another family who would have been a great fit but turned them away to give priority to my 'friend.'

What would you do if you were in this situation?