Although I keep a box of red dots in my studio, I almost never use them. When I make a sale, I just wrap the painting, the happy new owner leaves with it under their arm, and I put another piece up in its place. It's clean, it saves the hassle (for both sides) of requiring the purchaser to come back at a later date to pick up their work, and I have this small paranoia about buyer's remorse lurking in the back of my head. I did see the woman exhibiting next to me this weekend being forced to remove a red dot from one of her works... not an enviable position. Fortunately, she sold a lot of other paintings. Replacing sold works also maximizes use of valuable display space with available pieces.
On the other hand, unless you're paying close attention to what's up on the walls, it can look like you're not selling anything. As it happens, I did well this weekend, but I always had a full display of pieces, and no red dots. I got a few well-meant but unnecessary words of encouragement from other exhibitors ("there's always next year"). That's ok -- I can just smile and thank them.
I'm a little more concerned about it from the collector's side. Obviously, if a piece of art speaks to them, they'll buy it no matter what. But, human nature being what it is, there is a component of the process where people want things that others value as well. Success sells. If a potential collector looks at a display where it appears that nobody else is interested, is that the best message to be sending?
I don't have an answer. One of the pieces that sold yesterday was a painting I brought out of the box to fill an empty space. It was just *the* piece that spoke to the people who bought it, and if there was a red-dotted-painting there, I wouldn't have made that sale. I'm afraid this will have to remain one of those frustrating unknowables about the business...