I have a friend who replies "You're welcome" when I say "No thank you" to a question. It seems odd and kind of awkward, but I guess there is no harm in it. It just doesn't feel like the correct response. I have turned down the offer, so why state that I'm welcome to it? Are there any general rules with this?
"You are welcome" is used as a polite response to "thanks", not to "no, thanks" (denying an offer).
You are welcome: Used as a polite response to thanks.
‘‘Thank you for your help.’ ‘You're welcome.’’
"My pleasure", It was my pleasure", "You're welcome" etc. are also used to respond to "thanks" or "thank you".
From M-W Learner's Dictionary:
"My pleasure" is an idiomatic response to “Thank you.” It is similar to "You’re welcome," but more polite and more emphatic.
Use it in formal conversation when someone thanks you for doing a favor, and you want to respond in a way that tells them that you were very happy to help and that you enjoyed it. You can also use the longer form, “It was my pleasure,” which means the same thing.
I think the real answer is that it isn't a question of grammar or meaning; the "thank you/you're welcome" exchange verges on idiom. These are nearly automated responses that people say, and it sounds odd in this situation, which is what triggered the question. Whether the literal meaning is right or wrong, or what is the "correct" thing for people to say, this is commonly what is actually said.
Part of the confusion may be people saying it automatically in situations where it can turn out to seem odd. I'll try to provide some logic, but I'll focus my answer on explaining why it sounds odd.
People often say "No thank you" with the emphasis on "thank", so that it sounds like the "no" negates the "thank you". That may be one reason why "You're welcome" sounds like a non-sequitur; why say "you're welcome" if there was no "thank you".
The expression may make more sense if there was a comma or period after the "no". The "no" is the response, and the "thank you" is short for "but thank you for asking."
There are a number of expressions commonly used as a polite response to this exchange. If something was offered and accepted with a "thank you", a response like "it's my pleasure" or "think nothing of it" would generally refer to the act of giving.
"You're welcome" could refer to the act of giving, perhaps in the sense of "you're welcome to have it", another reason why it may seem like a non-sequitur when the offer is declined.
But "you're welcome" can also simply be a polite response to "thank you". It can even be used in combination, like "You're welcome, it's my pleasure" to cover both the act of giving and response to "thank you". So when the response is "no", it's the "thank you" that gets the "you're welcome."
Consider this progression given by chasly from UK to a related question:
- "No thank you."
- "No, thank you."
- "No. Thank you."
The level of gratitude increases through the progression.
In #1 (the form you are asking about), the 'thanks' are almost spat out. The words simply form part of a phatic expression.
In linguistics, a phatic expression /ˈfætᵻk/ is communication which serves a social function such as small talk and social pleasantries that don't seek or offer any information of value.1 For example, greetings such as "hello" and "how are you?" are phatic expressions. - wikipedia
Obviously, the speaker isn't particularly thankful for whatever has been offered. Trying to acknowledge the 'thanks' misconstrues the use of the words thank you and such acknowledgement may not be well-received. It would not make sense to respond to #1 with "You're welcome" since there is no gratitude to acknowledge.
In the last (#3), the speaker also declines but offers their thanks as a separate thought. This suggests genuine gratitude, which one might be inclined to acknowledge.
The intermediate form (#2) might be offered or heard in either sense.