client paid deposit then ghosted me for 4 months and now wants a refund

Small landscaping business here. Client paid a 2k deposit in January for a backyard job. I ordered 800 in materials, blocked out the dates, and turned down other work. Then nothing no replies to calls or texts for four months.

Now she emails saying she changed her mind and wants the full deposit back because work never started. It didn't start because she vanished.

She signed terms that clearly say deposits are nonrefundable once materials are ordered. Now a friend told her I can't keep it because no services were rendered. That logic makes no sense to me.

Has anyone dealt with a client like this? Do I stand firm or just settle to avoid the drama?