When someone says "danke" which means "thank you" in German, the standard and most versatile response is "bitte" which means "you're welcome" and also means "please," or the slightly more complete "bitte schön" and "bitte sehr" which add politeness. In everyday spoken German, you will most often hear just "Bitte" or "Gern" or "Gerne" meaning "gladly" or "with pleasure." A very common and friendly full phrase is "Gern geschehen" meaning "happened gladly" or "my pleasure," or the even warmer "Sehr gern" or "Aber gern." Among friends and young people, "Kein Problem" meaning "no problem" and "Kein Thema" meaning "no big deal" are extremely common and sound casual and modern. If someone says "Vielen Dank" or "Danke sehr" for a bigger favor, you can respond with "Bitte sehr" or "Gerne doch." If you are working in service, like as a waiter, you will often say "Bitte schön" while handing something over. Avoid saying "Kein Problem" in very formal situations with older people or in a business context, as "Bitte sehr" or "Gern geschehen" is more respectful. The key is that "bitte" covers almost all situations.
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