JazakAllah khair means " May Allah (swt) grant you goodness "
People usually reply to it:
Waiyyakum which literally means “and to you”
It is a form of dua`a though I haven’t come across it as being sunnah. In any case, when someone pray for another with “JazakAllah khair“, there’s nothing wrong in praying for the same for that person, in return by saying "Waiyyakum"