I have never thrown out pellets, the used pellets go in an old pellet bucket with a tight lid. and are used multiple times sometimes. And are just as effective as new pellets.
Prawns are sorted into the live well (all the small quickly released close to the boats hull so the seagulls don't get them) and water in live well is changed a couple of times while they await their demise. I find this cleans them up as the first batch or two of water pumped out has lots of color to it, then it stays nice and clean .....i am guessing they are shiting and or puking out what they ate.