I know that the word Bitte can have many different meanings. When translating Bitteschön into English word for word however, it makes no sense at all.
My question thus is where does this expression come from? Why 'Please nice/ Please beautiful'?
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Bitteschön is just the logical counterpart of Dankeschön which has derived as short form from Ich danke dir/euch schön, and that means I thank you very much. Schön is an adverb here in the sense of very.
Schön is a typical form of politeness. Examples: Er sollte Sie schön darum bitten / Ich danke Ihnen schön / Ein Dankeschön sagen, or antiqued: Habt (schönen) Dank!.
schön does emphasize somthing like very, pretty, and quite (compare also
It is used as such not just in Bitteschön and Dankeschön.
Das war ganz schön abenteuerlich.
eine schöne Summe
Dort ist es schön ruhig.
I have recently been learning German and I can say, that I have been told by a German, that "bitte schon" is simply "beautiful manners".
It can also be used after "hier" to make "hier, bitte schön" which, as some people have pointed out, is here you go.
It is in this case not an exaggerator and is simply a polite way of telling someone they have "schön" manners. Which I suppose doubles as a "you're welcome".
This does not mean that "schon" is never an exaggerator, as given in the phrase "danke schön" which is "you're very welcome." "Bitte, bitte" may also be used as a "you're welcome"-ish phrase. It's kind of like "oh please! No need to thank me" kinda thing. Hence "please, please!"
That was pure speculation as it could also be "pleased to please you", which is also a guess.
If you speak English, you should be familiar with the expression: "pretty please". It is exactly this just in German. It is a very polite way of saying please.