I would only pay a deposit on a specific puppy. For example, we paid a $500 deposit for Geordie. We wanted him specifically and it was our full intention to buy him, so we never even discussed whether the deposit was refundable. We already knew and trusted his breeder, because we had bought India from them.
With India, we didn't pay a deposit. We drove 9 hours to meet her and her breeder (and several other lovely cavaliers!) India's breeder was recommended to us by several well-known, ethical show breeders. We wanted to make sure we liked both the puppy and her breeder, and I'm sure her breeder and OH felt the same way! She and her husband had to get to know us and make sure we met their approval before putting one of their precious puppies in our arms.
With Chocolate it was different again! We had befriended both her handler and her breeder at dog shows. After Chocolate went into 'retirement' we got to take her home, then when everyone involved felt it was a good match/adoption we paid for her.:flwr: