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How does pfand work on the Technical Financial sense…

How does pfand work on the Technical Financial sense?

Considering that for example the bottle you pay pfand for in the south(ex. Konstanz) can be returned all the way in the north(ex. Kiel).

How does pfand work on a technical sense? Does the money you pay go to a central Pfand bank account from which you are paid when you return the bottle?
Do the grocery stores handle the financial part of it at each end of the year by keeping track of how many pfand payments they recieved and gave out? Do all the grocery stores balance their "pfand" balance sheets with each other? Do the grocery stores just eat the cost if they pay out more to pfand than they recieve?
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