A colleague did some work for me (which was his job anyway) and when I said thanks, he said "no thanks". I was puzzled, and asked why he said that. He told me that an American once told him that saying "no thanks" is the same as saying "no need to say thanks", for situations where a person is thanked for doing his job.
Sounds like nonsense to me, but I thought I'd ask it here just to confirm.
Nonsense indeed. They are quite different, if only because "no thanks" idiomatically just means "No, but thank you for offering."
Funnily enough though, "No thanks necessary/required!" is the same as "No need to say thanks."
No thanks is used to decline an offer from somebody.
'Do you want tea?'
'No thanks.'
No need to say thanks is used when someone thanks you for doing something.
So the two are not interchangeable in the context you provided.
If I said "thank you" and was told "no thanks" I would be quite confused what that person means. I wouldn't even know whether it's polite or insulting. So from a language point of view, it's wrong.
The normal reply would be "you're welcome".
