We would like to offer you the position." Usually those are the words every job applicant can't wait to hear. But what if you decide you don't want the job? Perhaps on consideration you have decided to stay at your current company (or perhaps your current company counter-offered.) Perhaps the offer wasn't sufficient for you. Perhaps you accepted a job at another company. No matter the reason, its important to decline a job offer nicely.
Thank the hiring manager
First of all, thank the hiring manager and recruiter very much. Thank them for taking the time to meet with you and for answering the questions you had. Be sincere in your thanks too. They probably have put a lot of effort in to the process. Let them know that you appreciate the effort they have put in on your behalf. You should always decline a job offer by phone.
Give a short but positive reason
Next, give them a short but positive reason. "After much consideration I've decided that now isn't the best time to leave my current job." "While this position is a great opportunity, I have decided to pursue another role that will allow me to grow in a different area. DO NOT tell them their offer was rubbish or that your current company counter-offered or that you heard a rumor they were going to go bankrupt in a few months. Keep it positive and don't feel like you have to go in to too much detail.
Stay in touch
Lastly, tell them you would like to stay in touch. Never miss an opportunity to expand your network. Perhaps they will have a better job for you in the future or they will know someone who might want to hire you. Say something like "I hope our paths cross in the future" or "Let me know if there is ever anything I can do to help you." If appropriate, you also might want to suggest a referral for the position.
A career coach can help you figure out how to decline a particular job in the best way.
You might also be interested in reading: Should I take the job?