When I was a full time instructor if a student showed up unprepared I made them do all their prep with me as charged dual ground instruction. We went flying when he/she (although it was almost always he) was done. This invariably resulted in a short flight to get the airplane back in time for the next slot Pretty soon most students figured out that they spent less and got more flying training if they showed up prepared. Either way I got paid the same
After I transitioned to part time instruction I just fired students who did not take flying training seriously. Students who cannot be bothered to prepare for their lesson are almost always poor candidates for a pilot license and there are enough crappy pilots already out there with out me contributing to the problem