The on-the-spot fine was due to come into force on Jan 26, despite no communication or consultation with the retail trade.
The ACS and the British Retail Consortium called on ministers for a three-month delay to allow all retailers to be made aware of the penalty they could face.
The government announced today that it will consult with the trade before deciding whether to continue with the plans.
ACS chief executive James Lowman said: “We welcome the fact that the government has taken the decision to withdraw the legislation and will now take time to consult widely on the proposal.
“It is vitally important that we fully understand the implication for enforcement of the introduction of new penalties. We look forward to playing a full part in consultation on this measure.”