The faulty claw hammer was found to be on sale at B&M Retail's Yiewsley store and after being told to remove it from sale the retailer was fined £2,500.
A complaint was received by Hillingdon Council's trading standards officers about the faulty claw hammers in May last year.
The complainant claimed that the head had quickly come away from the handle.
A trading standards officer bought a similar handle and sent it away to be independently tested. The hammer failed the testing.
Testers found that the head was not sufficiently fixed to the handle to withstand normal use and that the striking face was not hard enough, which could cause metal fragments to chip off causing potential injury.
B&M was advised of the failure and told to remove the hammer from sale, but continued to sell it regardless.
A second hammer was later bought and tested, with the same results.
As a result B&M was taken to court and on June 24 at Uxbridge Magistrates' Court a director from B&M Retail admitted the charge on behalf of the company of supplying an unsafe claw hammer at its Yiewsley store.
B&M Retail was fined a total of £2,500, with £120 victim surcharge and £2,000 in court costs.
Councillor Jonathan Bianco, Hillingdon Council's cabinet member for finance, business and property services, said: "We try to give advice to businesses to help them comply with legal requirements.
"However, it is irresponsible of the store, after being advised of the fault, not to remove the hammer from sale, and I am pleased to see the courts took this matter seriously.
"Our officers have acted in the interest of residents in bringing this matter to court and I am pleased that potentially serious injuries are likely to have been avoided."