What is the timeline allowed for return of the money? In that sense can it be kept until such time as the space is refilled. I know it is likely different since you are the one terminating. I also understand where the family is coming from as they will have to replay the same deposit to someone else that they may feel that you are making up stories about their sweet never cries at home cause of the AP child just to make extra money and that is why they are making a fuss to get it back. Reputation is likely not worth keeping it but doesn't mean it is owed back the day they leave either - at minimum it is at the end of the month or quarter or whatever the bookkeeping services allow for.

Assuming you have to give proper notice too then the money would go towards the last two weeks of care. If they decide not to bring the child back for those two weeks then they forfeit the money so you may need to tough it out for two more weeks - which means just returning the money might be easier on your sanity.