Underfoot Interiors Ltd was also issued with a prohibition notice - requiring an immediate halt to activities.
Wolverhampton Council found that the Park Lane-based business was letting customers inside during a visit on January 9, despite lockdown law only allowing for home deliveries or collection.
Two days earlier, the local authority issued the firm - which trades as Mayfair Carpets - with a warning letter after receiving a complaint that it was breaking current restrictions.
The council followed this up by contacting the firm numerous times that day, and on January 8, with advice on how to operate in line with Government guidance.
Councillor Steve Evans, cabinet member for city environment, said: "We're not talking about genuine mistakes here, but deliberate breaches of the rules."
He added: "This new variant of Covid-19 is much more aggressive and presents a much greater risk than during the first lockdown, there is no excuse for blatant disregard of the rules.
"Our hospitals are filling up with Covid patients, this is an emergency and we must all follow the rules to bring the virus under control.
"There is simply no excuse for any business to be breaking the rules and we will not hesitate to fine and close down any establishment that puts public safety at risk.
"Our message is simple - break the rules and face a fine.
"No business is above the law and they must put the safety of their staff and customers first."
The prohibition notice was served to prevent any future breaches of the restrictions, which would result in additional fines.
Anyone wishing to raise concerns about businesses breaking Covid rules is asked to email firstname.lastname@example.org.