How often do your PCs give their opponents a chance to retreat? Are there mitigating circumstances that would make it easier or harder for them?

I ask because it's something that I've witnessed as divisive in my Pathfinder party, particularly when:

1) The other side is evil-aligned, and/or
2) The other side were the aggressors.

Sometimes, it's a lone mook or two from a larger party that the GM makes a morale roll on, and then usually has them ask to Quit the Field, because he's obviously outnumbered and outgunned now. One time in the last session, it was me making the offer, first to a Mountain Giant that was occupying a fortress we wanted to search, and then to his "boss" (a much larger Mountain Giant) who came out to stomp us and got a sound asskicking of his own.

I'm playing a Cleric, whose main motivation in adventuring is to prevent casualties. This mainly means the other party members, but it includes the opponents to an extent too. When it starts to look like there's someone clearly about to be killed outright in the next round, she'll ask them if they'd like to run away instead. She won't do this with elementals, demons, or evil-aligned outsiders, but anything else sentient enough to understand the offer she'll extend it to, and some of the other PCs object because it means they'll live to try to kill again.

So, what's your opinion? Does your party ever allow a retreat of someone who's clearly already lost?

And let the loot run away?!?!

I'm only kidding, but this is actually a problem. Most parties don't want to let people get away because they are carrying magical gear or have the potential to be carrying it. If you are playing a published module, the authors sort of expect you to get that gear. It's what is making up most of your wealth by level. If you don't get it, you may find yourself a little short changed and future encounters will be more difficult. My opinion, is that a good GM should adjust for this factor. I'm 100% in favor of letting those people go. But a GM should make sure to double up on treasure or adjust things as needed to ensure the balance.

It depends on the group for me, but I don't know that I've ever had one who just let enemies off the hook.

Some folks let an enemy escape so that they can track him back to his lair. Some folks switch to subdual damage and start looking to take prisoners for interrogation. Of course, anyone who surrenders to a bunch of PCs has pretty much accepted a death sentence.

As far as loot is concerned, one could demand surrender and "confiscate" the enemy's equipment. It might not always work, as some enemies will just run. However, one could deny retreat by using trip weapons and disabling spells (such as bolas and hideous laughter). Then you capture the hostile, relieve him of his encumbrance penalties, interrogate him for information, then tell him to flee from this country because his superiors will likely kill him for talking. For extra points, give him a t-shirt that says "I was taken alive by PCs and all I got was this lousy t-shirt."

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On the subject of getting people to surrender:

Last night, I was in a dungeon crawl in which the druid of our party summoned a girallon next to a bandit. The girallon then proceeded to tear the bandit apart. When my turn came, I created a minor image illusion of ANOTHER girallon on the opposite side of the other bandits. As it appeared that they were surrounded by monsters, the bandits surrendered. Had our barbarian not slaughtered the captives without a second thought, we might have been able to interrogate them...

That was one of two intimidation tactics that I devised with my gnome sorceror's illusions and the druid's conjurations, though the only one we had a chance to field test. The other one was for the druid to summon a megaraptor for all to see and then for me to very loudly cast Greater Invisibility on it. I don't know about you, but I wouldn't want to be around with an INVISIBLE over-sized dinosaur on the loose. The GM's eyes were wide open after I mentioned that one. "And you guys think I'M the power player? I'm not letting you two casters sit next to each other anymore."

Interestingly enough I'm soon starting a Hellas campaign, and one of the setting conceits described is that combat should rarely be to the death, except against frenzied or unintelligent opponents or between bitter enemies. Killing fleeing or unconscious enemies just isn't glorious or heroic.

I would have a problem with my players if they insisted on killing every opponent on the grounds that they would "live to kill again." I see that argument cropping up time and again, typically applied to superheroes, and I find that kind of aggressive moralising really off-putting. At best, I often see it as the players trying "beat" the GM and assuming that if they let an enemy live and he later causes problems, that they've "lost." At worst, it's an excuse to indulge in gratuitous violence.

If the players go around acting as murdering vigilantes, I would have them suffer for it. Even fantasy worlds where the rule of law might not be as easily enforced, the concepts of honour and mercy in battle are well established in most settings. I think there should be more harm done to the characters in terms of their reputation and the respect they gain from others than the benefit they get from making sure everyone they defeat is dead.

On an OOC level, I think the GM should make it pretty clear that killing everyone they defeat carries no benefit whatsoever, as he can always create more enemies. In fact I'd go so far as to say that mercy should be rewarded, both within the game world and by the GM.

It happens with some regularity in my groups, but the players also understand that I won't punish them for IC actions.

Basically, I've noticed that the more cutthroat / rules lawyer the GM, the more lethal the PCs will be.

On the notion of short hanging the party of their loot, most people discard their heavier weapons/ gear when they run away so as to run away faster and not get caught.

I would make sure any player properly RPing their character would be rewarded. Especially depending upon the degree of enemy they "let go".

I agree with you, but I would take it a step further. Make sure the players are aware of this, let them know they're not going to fall behind the leveling curve. Else it's not going to influence them and they'll still think loot is running away. That way they know their choices like this are influencing the story/role-playing, not their power-gaming.

You could say this is a little bit too much like guaranteeing success for the players (not an unreasonable criticism I think) but to be honest most players are aware of this stuff anyway, especially in Dnd. The fighter can only find a better version of his favoured weapon so many times before it seems a little too convenient

On letting the loot run away: This is the GM that does not track XP points, and periodically says "Ok you're all level X now, adjust your equipment accordingly." That means any loot that WAS found has to either be part of our current equipment and stay within that budget, or we have to toss it. Also, I'm not letting everything flee. Just the last one in a group usually, and even then any one of the other characters could always choose to say "Screw that, this one's gonna die," and I'd be unable to do much about it.

Actually, allowing the Mountain Giant King live winded up working in our favor, as he was in possession of something we needed to find to advance the plot, and had we killed him outright the GM would have been hard pressed to find a way to get us to where it was. The party's ranger actually tried the "letting him live means he'll kill more people" argument with that one, and I pointed out that we invaded his place, and the only ones who ever came this far out were adventurers who were looking to fight giants.

There was one other exception to the "let them surrender" rule I had been acting by, and that was a pair of silver dragons that strafed the party and killed off our horses. One of them was stopped mid-strafe by a mystic theurge casting Energy Barrier right in front of it, which stunned it and forced a landing. Once it came to (after it had been bloodied), it asked to just leave, and my character was too angry about the loss of our horses to agree. It got away anyways because of its speed, but it took some more damage while fleeing.