1. DON'T: When you expect something in return. This can be anything at all: a date, coffee, even a "Thank you" or a smile.
2. DON'T: If there's a chance that you will become hostile if/when you do not get the correct (or even any) response
3. Speaking of sincerity, DON'T: When you don't mean it.
4. DON'T: When it's actually an insult in disguise
In that case, at least try to be clever, like Judy Geller or, even better, Lucille Bluth
5. DON'T: When it's for something ridiculous, like breathing.
Again, it's not always the compliment that raises hackles, but what the compliment might be implying. Or the intentions of the person giving the compliment.