When you have a big waiting list, you can set your policies as you like, no refunds & such. I have not always had the luxury of living in one place for many years to have long waiting lists. Nevertheless, if one shows the students & parents that you are to be respected as an educator, they are more likely to appreciate your time. The older I've gotten the less able I've been to do "normal" jobs & the more I need the $$, however--for those who have been faithfully with me for a long time, I'm more lax, especially when it is unusual for them to miss. My habit is to attempt to reschedule asap for another day, or perhaps 2 lessons next week. I attempt to help my students (& their parents) understand that Music lessons are a privilege, & an investment in oneself & one's future, therefore one must learn to be responsible & committed re lessons as one should for one's school work &/or job.
   When I speak with students & parents that I have such expectations of them along these lines, there is little problem with losing money to missed lessons. I also have lying about in my studio a copy of an article I wrote on "The So-Called Mozart Effect, or Why Music Makes You Smarter" which students & parents most always read at one point or another. This also helps them to understand the value of good Music Education, & hopefully, a good Music Educator.
   It also doesn't hurt that I usually keep my shingles & commendations & such (from the past 30 odd years) framed & displayed on my wall for all to see.