i charge testing fees, but if they do not pass they get a refund. i explain to everyone that comes in the doors before they sign up understand there is extra costs to martial arts. belt testings sparring gear weapons. and no one is surprised by anything and 99 percent of the time people still sign up. i only test people when they are ready to i pretest them for free and if they press the issue of testing before they are ready i charge 25 non refundable. all my student know this and there is no issue.