Should You Use Email?
Even if you are excited about a job offer, always ask for at least a day to think over the offer. Ideally, the offer of employment should cover salary, benefits (including vacation time), work location and some information on your job responsibilities. You may also wish to discuss the offer with a trusted friend or family member to get some perspective. If you decide that the job offer is not suited to you, you then need to decide how to decline the job offer
Using the Telephone
Some interviewers and hiring managers prefer to speak to candidates by phone. This preference may be stated directly or indirectly during the job interview process. For example, if all of your pre-interview communication was by phone, then it is fair to assume that declining by phone is acceptable. Since declining a job offer can be emotional, you may want to write yourself some notes or a short script to help you stay focused before you call.
If you get easily nervous on the phone or simply prefer to communicate in writing, then it makes sense to decline a job offer by email. Make sure you address the interviewer from a reputable email address, preferably one that uses your first and last name (e.g. email@example.com).
Declining in Person
Declining a job offer in person is a good option if you happen to know your interviewer (or the hiring manager) socially or from a different context. This option also makes sense if you are applying for an internal position at your current employer. Make sure to book a meeting room or otherwise meet in a discreet fashion.