This item is no longer available in game.
Open the faction up (quest guide here) to go from Hated to Honored, then use the badges.
Added in Patch 3.0.2. It originally was a reward, but was moved to the vendor in Patch 3.3. Buffs, human racial, and guild perks do affect the amount of reputation given.
It was removed from the game in Patch 6.0.2 due to the retirement of Justice Points. When asked why the commendation badge could not be bought with gold (as with other items that originally required JP), Blizzard essentially stated that it would be "avoiding the gameplay associated with them." (source)