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Yes, but there could be legal consequences, so an attorney's advice should always be sought before rescinding the offer. Even if an employer has stated on all offers that employment is at will and can be terminated at any time, there is the concept of the employer making a "promise" of a job.
Thanks so much for letting me know. We're disappointed, of course, and if there's anything we could have done to change your mind, I'd love to know but either way, we think you're great and wish you the best of luck in whatever you do next!
You can send an email or letter expressing appreciation for the employer's time and consideration, with the option to include a reason such as how the position wasn't a good fit. Or you can call the hiring manager and advise them that you've had a change in circumstances.
After careful consideration, I would like to withdraw my application for the job. I sincerely appreciate you taking the time to interview me and to share information on the opportunity and your company. Again, thank you for your consideration and the time you shared.
Keep your message positive and state that you are withdrawing from consideration for the job. If you choose to explain why, present your reason simply, making sure to avoid any comment that might be construed as criticism of the employer. Relay your appreciation. Thank the person you met with for his or her time.