When should I pass by value and return and when pass by reference?

I ask this question because i learned that in programming and designing, you must have a good reason for decisions. I am php learner and i am at a crossroad here, i am using simple incrementation to try to get what im asking across. I am certainly not here to start a debate about the pros/cons of referencing, but when it comes to php, which is the better programming practice:

function increment(&$param) {
      ++$param;
}

vs.

function increment($param){
 return ++$param;
}

$param = increment($param);

First, references are not pointers.

There are reasons why you should avoid references. Though they can simplify several algorithms, especially when you are manipulating two or more data structures that must have the same underlying data:

• They make functions have side-effects. You should, in general, avoid functions with side-effects, as they make the program more unpredictable (as in "OK, how this did this value get here? did any of the functions modify its parameters?")
• They cause bugs. If you make a variable a reference, you must remember to unset it before assigning it a value, unless you want to change the underlying value of the reference set. This happens frequently after you run a foreach loop by reference and then re-use the loop variable.