Good luck Halfbreed.
That is a good move actually. Offer designing for free to build your portfolio. When we started here in WHT we also run a promo on FREE banners and logos. We had made several of them actually. From there, we met friends who have supported us all the way. Then, we started to have $20 logo promo which most people here grab, then the $30 customized illustration (which we are currently running and will end soon!
If you do good designs and be mindful of your clients' needs, there won't be any problem. Even for us, we have some clients who don't like the initial designs, but it would be good to talk to them and ask for another set of tries to "redeem" yourself. When they ask for a refund, don't bother to ask why, issue the refund at once.
Again, we wish you the best.
Take care everyone.