Kelli --
First, realize you're not going to change the other person.
That said, my response depends on the situation. From time to time I strike up conversations with strangers whose bigotry is evident in a fleeting remark. Those I usually let slide; I don't make an issue of the fleeting remark.
However, if someone starts talking at length, airing racist views, I'd cut them off with something like, "I don't share your opinion." You're not attacking them, but you're letting them know where you stand. Unless they're dense, they'll take the not-so-subtle hint.
Now, if you're talking about a provider-client situation, I'm not sure what I'd do. Someone who's already that ugly could do something so vindictive as to put your security and livelihood in jeopardy.
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