I never give them money. The vast majority of the time, it's a scam to get money for alcohol or drugs. And I don't have any problem looking them in the eye when they stand on the freeway off ramps.
Off course, they have the "key phrases" to get them sympathy and induce our guilt: "Veteran", "God bless", and of course, " Hungry, will work for food".
I figure if they can stand in the blazing 100+ degree heat for hours panhandling, they can certainly flip burgers.
The last two instances I encountered panhandlers were in store parking lots. When I spot them making a beeline towards me, I make it clear to keep away by saying "Don't approach me, please". So far, they have turned and walked away.
Though, I very much believe in helping those who help themselves. To those people who find themselves in dire circumstances, and need help to get back to their feet and are doing all they can to improve their situation, I have much compassion and an open wallet.