Am I obligated to pay back a deposit when a customer changes their mind?
I've already started the job and spent money on materials and wages. The customer wants all of the deposit back. Do I have to pay back a deposit when the customer changes their mind down the track?
Obligated? I don't know, but the best practice would be to return SOME of the deposit.
In my case, I contacted them and said that the deposit was final, but I could return some of the money. They agreed.
Depends how you have negotiated the contract, in my view, it should be mutually discussed and come to a common ground that works for both the parties.
That's your discretion what you decide to do in this position, not the law. My understanding of a deposit is essentially so that they wouldn't flake/change their mind.
Personally, I would just give them the money back, it's not worth having someone doing a bunch of passive aggressive nonsense over a transaction they intend to cancel.