The meaning of tchao

So far I didn't had huge problems with the language. As I speak a bit of Spanish, I normally understand what the people are talking about and they understand me (or they keep on smiling very nicely, saying yes to everything I say). However I had my first "figura di merda" as we call it in Italian when I went alone to the supermarket. When I crossed people, people used to say "Oi" (Hello) and I answered with a friendly "Ciao!". But they were all starring at me in a weird way, and I couldn't understand why! When I went back home, I told to Luciola what happened, and she started to laugh (once more), telling me that here "Tchao" is used to say "Goodbye!". Of course the people looked at me in an odd way: they used to say "Hello" and I always answered with a "Goodbye"...