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  Sticky situation!  This should have been discussed at the time the party lite was given/sold.  You can never presume that deposits are refundable/non-refundable.  There needs to be a written or verbal agreement.
 If she wants to take you to court, it could go either way.  Also, she could slam and bash you and that could hurt your reputation.  Sometimes, the money isn't worth the headache you'll have to deal with later on...
 
 Good luck!
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