First off, don't volunteer anything. Second, if they ask, I wouldn't say anything beyond "we don't feel you're a good fit" and end the conversation. It is not your job to provide career counseling. I understand the frustration dealing with this stuff, along with the desire to help people who are desperately in need, but unless you are a professional career counselor on the side, don't do it. While someone might listen to you, the vast majority are just going to argue with you. For instance, the woman in the tube top -- dollars-to-donuts that her response would be "What? You're just jealous because I have big boobs. That's discriminatory! Lawsuit!!!!" Or "Inappropriate flirting? I'm just friendly!" Even when they ask, most people aren't interested in hearing bad things about themselves.
This is one of those situations where "don't JADE" (Justify, Argue, Defend or Explain) is your best approach.
I'm an HR rep and this is the way the screening process works at the agency I work for:
1. Resumes arrive via email, fax, U.S. Mail or in-person drop-off.
2. I check each resume against the qualifications for the position (as clearly stated in the ad).
3. If the applicant meets at least the minimum qualifications, the resume gets forwarded to the hiring manager (and--if this is a teaching position--our Education Manager as well).
4. If the applicant DOES NOT meet minimum qualifications, he or she gets a form "thanks-but-no-thanks" email that reiterates the minimum qualifications for the position and says that we are interviewing only candidates who already meet those qualifications.
5. If the hiring manager and/or Education Manager agree we should call the person in for an interview, I schedule an interview.
6. If the hiring manager says no, I send a "thanks-but-no-thanks" email saying we have decided to interview other candidates at this time.
7. The candidate(s) selected to interview are interviewed. There are usually 3-4 people on the panel, including the hiring manager and me.
8. We offer the best candidate the job!
9. Candidates who were not selected for the position get a "thanks-but-no-thanks" email saying we have decided to offer it to another candidate.
I don't get asked for feedback all that often, even though we have had as many as 100-130 applicants for every opening. But yes, even after having resumes screened by several different people, we've gotten a few "rotten apples" in interviews. (I remember someone applying for an IT job who showed up in sweats and green Birkenstocks... and a couple of people who would have done much better in the interview if they hadn't been rude to the interview panel or the front-desk staff.)
I do still get resumes from marginally-qualified (or not-qualified-at-all) candidates--but in that case I do try to be sympathetic, unless they've given me reason to be otherwise. The way the unemployment laws are set up where I live, anyone collecting benefits must be "actively looking for work." This means they have to make contact with at least 3 different employers during the week.
There have been a couple of rude responses to the "thanks-but-no-thanks" emails--but the way I see it, they're just shooting themselves in the foot. I am not responsible for their bad behavior--they are. And they've just eliminated any chance of being considered for a different job with the agency.