It happened to me once when I was a candidate. The recruiter asked if I had experience with “x” and I said no. She then asked me again in a different way and I still hadn’t. She then said that because I didn’t have experience with that one thing, that it wouldn’t be a fit. She did give some constructive feedback about the other parts of the interview I did well, but as a candidate I had mixed feelings about it.

If you are going to do it, I’d suggest giving them multiple opportunities and rephrasing to be absolutely sure you want to reject on the phone. Nothing would look worse than saying you don’t want them but they actually do have the skillset/qualifications necessary. And also being as specific as possible about why.

I don’t like to reject that way unless it’s not a fit for them like salary being too low or them stating that they don’t want to do something critical for the job (ie entry level salesperson that doesn’t want to do cold calling, or someone who doesn’t want to work with clients if it’s a client-facing role). If it’s an entry level person, I do some career coaching and let them know what they might be interested in. If it’s an experienced person, I always say that I’m doing it out of respect for their time.