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Often, a freelance designer will ask a client for a testimonial to help market his or her services. You'll find many freelancers using such testimonials on their own Web pages to bolster their marketing.
If you had a good experience with the freelancer, by all means agree to this. If you don't have time to write something yourself, let the freelancer write it and give you the opportunity to edit. You'll be doing that person a favor and promoting your own business as one that is aware of quality design.
If you are asked to give a testimonial for someone who you don't feel you can honestly recommend, you have a choice. One response is to be kind but honest: "I would like to recommend you, but based on your performance with our deadlines, I can't honestly do so." Another is simply to indicate that you don't feel you know the person well enough to give a recommendation.
Either of these approaches should be enough to send a smart freelancer looking elsewhere for a testimonial.