American Express Co. is terminating foreign-exchange employees and refunding money to nearly 200 customers after it found salespeople misrepresented pricing to customers.

The company on Tuesday began mailing out reimbursements totaling about $1.6 million to forex customers, an AmEx spokeswoman said. It also terminated 10 employees in the foreign-exchange international payments department and is retraining 28 others, she said.

The...