I'm almost never nice to those mother fuckers honestly. They ask for something and I say, "Nope." and ignore them. In my opinion it's the best way to handle those situations. If you try to be nice they think you're weak and either don't leave you alone or try something violent.
One time a couple of them approached me and my mom as we pulled up in her car to a gas station. The one asks for a ride, I say, "Nope." and ignore him, the other one asks for some change, I say "Nope." and proceed to pump gas. They tried to approach my mom as she was walking into the gas station and I say, "Don't fuckign talk to her, don't fucking look at her, don't even think about her later on when you're sleeping in your box or I'll tie you two bummy mother fuckers in a knot." They just looked at each other and walked off shaking their heads and muttering something about being Army vets.
I was nice to a bum one time. He had a mountain bike loaded with tons of crap and had a flat tire. I had a spare tube (that was actually too big for his tire) in my car so I gave it to him and even helped him change the tube. But this guy was clear headed, polite, and genuine as hell. He just saw the bike rack on my car and asked if I could help him with a bike problem. After we were done I gave him a 20 dollar bill and he tried to refuse it for a second. The dude really impressed me, for being a bum anyway.