I attend classes organised by the Sage Gateshead. I pay my fee termly in advance. To get value I make sure I go - I enjoy it anyway, but if I miss no refunds.

If organisations can do it, why not private individuals? I am sure you will get more commitment that way. If you feel it unfair not to refund for genuine reasons, have a clear policy - minimum notice period, list of acceptable reasons (illness?) and stick to it.

Cheers