You’re welcome in Japanese

Do people in Japan normally say you're welcome?
Like when they say thank you waht do you do or say afterwards, what would you do different if you are familiar or unfamiliar with the person?

Do itashi mashite.

Yes. Japanese does have a phrase for 'you are welcome'. Its as stated above. Hope that helped.

- Dou itashimashite.

...is the standard phrase meaning "You are welcome."

However, saying "dou itashimashite" means you've accepted the thanks, and this can sound like you deserve the thanks. So some people go humble and say:

- Iie, tondemo arimasen. (No, I don't deserve it.)
- Ie ie, kochira koso. (No, no, the pleasure is mine/you've done a lot for me.)
- Ie ie... (not at all...)

But the phrase choice would depend on the situation.

In casual speech, "dou itashimashite" is sometimes abreviated in "doitama".

"Doitama" is just as informal as abbreviating "Akemashite omedetou gozaimasu" (Happy New Year) into "ake-ome," and it is beyond informal - only to be used among close friends AND only on chats and short messages. Don't use it in settings requiring polite talk.

Don't use it in settings requiring polite talk.

I think that's the definition of "casual speech"... Unless you have a different one?

Firas,

There is this grammar terminology of "informal/casual speech" and "polite speech," referring to the -(r)u and -masu forms. I don't want people to mix up that definition and "really being casual," that was all :) So I wanted to emphasize that it is definitely a casual-casual thing. I wouldn't even use it among my friends, no way.

Personally, those internet/chat lingo is something that non-native students don't have to be taught; they pick it up along the way, so no need to teach them those :)

"doitama" is not usual
just using only young Japanese on Twitter mainly.
Over 50% users vote "no good" I agree,too.
http://monjiro.net/dic/rank/29/18463/3

Being a middle-aged Japanese resident with a youth around the house, this was the first time I heard of the term "doitama". I think we can say that it's one of those slangs that are too new for many people to understand. And it can be rude if you use words that people can't understand when words are supposed to be used for "communication".

Meanwhile, shortened terms that are commonly used among friends are expressions such as "iie" or "ie, ie".

A: arigatou!
B: ie, ie.

I wouldn't use it carelessly to a senior or a business aquaintance though.

familiar saying...
"iiyo" or "iiyo, kore kurai"
"iya" or "iya betsu ni, ki ni shinai de"
As AK said, it depend on the situation, of course.

BTW, the first time for me to hear "doitama".
It sounds like slang terms called "gyaru-go".