First the team and the client are given the opportunity to work out a solution. Then Squads.com will mediate. If no solution can be found, the last week will always be refunded. Depending on the cause for the refund it can be harder for the client to find a new team, or it can be harder for the team to find work.
Refunds have been and should be extremely rare (less than 0.1% historically). The reason for this is that we do a lot of quality checks up front. Also if things don't go as planned, we invest in fixing the relationship and delivery much more eagerly than simply refunding. Usually both clients and teams prefer to move forward.