
Before I bred my first litter I read the book of the bitch, which advised taking a deposit.
I have a numerically small breed.
This means that puppies and suitable puppy enquiries are often feast or famine.
I didn't take deposits with my first litter (just 3 pups to home).
I had 3 people end up cancelling on just two pups, having passed on good puppy enquiries to other breeders. This meant two of the pups didn't leave until over 12 weeks once suitable owners came along.
So from then on I have taken a deposit (10% or less) from those on my waiting list once the litter are born, and they are sure they wish to proceed.
This allows me to pass on surplus enquiries elsewhere.
I did once return a deposit to someone on longer aquaintance situation was unsuitable (I didn't think they'd cope with a second dog).
I also returned one to someone who had a genuine change of circumstances.
In breeds that are easily sourced and also puppy enquiries likely to come along regularly then a cancellation isn't such an issue as someone else will come along in days.
Also when there are few puppies available those waiting prefer to know sooner than later if a puppy will be available or not.
I have never felt someone had a pup they didn't really want because of the deposit, as my deposit is no more than the cost of fuel to visit and pick up. In fact many people are happy to visit several times.