This excellent post over on The Dragon's Flagon prompted this post in turn.
If you read the Tales of Froissart, Medieval history in general, or watch lots of YouTube histories of battles (like this one here), you'll constantly run into the concept of ransom of nobles. Capture an important enemy knight, you sell him back to his family (and treat him well in the meantime.)
I find most gamers come at battle with a 20th/21st century concept of ruthless total war. A defeated enemy is a prisoner. Prisoners are held indefinitely or killed outright. All belongings of the defeated belong to the victor. A prisoner has no value to the victory except for what he or she carries or the information he or she can give about allies or treasure. And that's more easily extracted, in fantasy games at least, after murder using Speak with Dead (D&D) or Summon Spirit (GURPS Magic.) The concept of prisoners for ransom, prisoner exchanges - a perfectly common 20th century phenomenon, and release on exchange (you go home and don't fight until officially exchanged for another prisoner) - they may as well not exist.
With that in mind, would you surrender? At best, you're looted of everything of value and set free, but that's unlikely. You expect to be stripped of gear and either sold into slavery or murdered.
But I think there is a way to do this.
Laws of War
Implement some rules of value.
Make it clear right from the start of the campaign that there are certain concepts of war and battle that are accepted. When a civilized foe is defeated, it's accepted in general that he or she should pay a ransom in return for being spared. You may claim their goods, or a ransom, but not both - and it's generally preferred that you claim a ransom. It's considered bad form to seize goods outright with the acceptance of such by the defeated. Ransom will generally be in cash, but can also be in kind, deeds, or promises (in a game that needs them - I'll respect your borders for a year, we'll conclude a pact, I'll protect your allies in my territory, etc.) If you can't pay in cash, you can hand over your gear.
Service also counts. Using the rates as a hireling (DF15, p. 32) to calculate how long of service works, or you can default to a year's service in lieu of handing over goods of value. This is a great way to get hirelings, by the way - defeat the enemy, recruit them instead of looting them, and you've got hirelings who've agreed to work for you for a year without pay (you would still need to make sure their upkeep is cared for, through loot or pay.)
Another option is to pay a month's upkeep. A Status 0 foe might owe $200, while a high-ranking noble may owe many thousands. They could easily be worth more than their carried goods.
For example, you defeat a foe and he or she surrenders. You can claim his or her gear and let them go, or you can claim a ransom. The ransom should be similar to the sale value of the gear seized - say, 50%. The defeated and the victor can negotiate turning over a particular piece of gear as part of the negotiations. If you defeat an enemy swordsman and he doesn't want to give you his Weapon Bond sword he doesn't have to, but may have to pay quite a lot to keep it (assuming the foe values it correctly.)
Also state outright that NPCs follow these by default. That is, it's likely that foes will follow these rules more than they'll break them. Most enemies will follow these rules; ones with "oath breaker" disadvantages will have appropriate reputations. But otherwise, assume civilization matters and the rules are followed.
The concepts of absolute good and evil work against such social mores, however. Can you free a member of a Chaotic Evil race? Would a Lawful Good character free an evil foe, and vice-versa? Would Lawful Good people really be fighting each other to the death? Those are maybes, but it's another layer of complication and another step in the going-on 50 year arguments about what alignment means. In a game without strict alignment but clear definitions of evil - GURPS Dungeon Fantasy, for example - it's unlikely true evil will just ransom off a Holy Warrior of the Good God or spare some "useless" prisoners. But the more civilized types might - anything that lacks "Truly evil" could follow these norms, rules, and mores. And even then Truly Evil ones may spare those that surrender in an attempt to use Good to defeat Good. And Good can try to use the weaknesses of evil to escape and win the day, as well.
All in all, though, I feel like stating outright that surrender is viable and likely only costs you service or some of your cash can help. Combined with "fleeing always works" and knowing what the foes want can make fights doubly less all-or-nothing decisions. Players fear death of their PCs and often fear loss of their cool stuff more than death. "I may as well be dead if I'm going to lose my magic sword and armor" can end a PC and make for long slog fights where the players desperately try to drag it out while they come up with a miracle to win. But knowing, hey, I surrender and pay some cash and escape - maybe that's the way to go. Maybe next time after the extracted truce ends, you can get some payback. But surrender doesn't equate with death, and it's stated outright.