Can one forgive a thief?
I took something from a place some time ago, and did not return it.
I recently sent them a letter about this and offered to pay them back, but they said that they are me מוחל?
What is the הלכה in this case, am I still required to repay them, what am I supposed to do?
A thief can be forgiven.
If you offered to pay and they agreed to forego the obligation, there is nothing more that you need to do vis-a-vis the store or person involved.
However, you still need to do teshuvah concerning the act of theft itself.