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It is mustahabb (recommended) for the Muslim to return the greeting of salaam in a manner similar to that which was said to him, or better than it.
Islamic teaching recommends that the recipient of the greeting should return the greeting in a manner similar to what was said to him, or better than it.

Allah (may He be exalted) says (interpretation of the meaning):

“And when you are greeted with a greeting, greet [in return] with one better than it or [at least] return it [in a like manner]. Indeed, Allah is ever, over all things, an Accountant”

[an-Nisaa’ 4:86].

Ibn al-‘Arabi (may Allah have mercy on him) said:

With regard to the words of Allah (may he be exalted), “greet [in return] with one better than it or [at least] return it [in a like manner]”, there are two views:

The first is that it should be better in it in character, so if he wishes you a long life, then say “Salaamun ‘alaykum”, for that is better than it, and it is in accordance with human nature and with the teachings of the monotheists.

The second is if he says to you “Salaamun alayka” then say “Wa ‘alayka as-salaam wa rahmatullah.” End quote from Ahkaam al-Qur’an (1/464-465].

Ibn Katheer (may Allah have mercy on him) said:

The words ““And when you are greeted with a greeting, greet [in return] with one better than it or [at least] return it [in a like manner]” mean: If a Muslim greets you with salaam, then return the greeting with something better than he said, or at least return the greeting in a similar manner. Adding more is recommended, and returning a similar greeting is obligatory.

End quote from Tafseer Ibn Katheer (2/368).

Time stamps:

0:00 Intro
02:23 Short greeting
05:52 Medium greeting
09:20 Long greeting
12:40 Practice
14:36 Bonus