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I do have a question, is this a deposit she wants returned or a payment she had already made. Either way, I personally would return it. Since you did give her two weeks notice that was nice, but with that they obviously have the opportunity to give you a 30 day notice. Given the notice she may have had to take this new spot before she was passed over. In reality it may be hard to find quality daycare in two weeks.

Speaking from experience you may decide to reopen some day and this may effect your reputation.

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