I work in the pet trade. I have been in three different smaller shops throughout that time...
MOST are humanely killed in a co2 chamber. Sometimes, when need be, I had to do the duty, I used to wack them by a method recommended to me by more than one person, put them in a fish bag, one huge swing and blammo on the counter. They all died immediately, one wack.
A local snake breeder used the spine method. He holds them by the tail and in one swift motion he flicks his wrist, wacking them against a metal garbage pail rim.
Now I know what you mean by some of them looking REALLY beat up. Unfortunately we have an inexperienced breeder, who when we ask for frozen, they usually have blood frozen on their faces and stuff...

I don't think he is very good at "wackin'" them yet
Funny you mentioned the sleeping thing, for the first few years it bothered me, but then once I saw how many pet shop employees thought nothing of starving a snake to death just because they couldn't deal with feeding them mice, I realized that it was much less cruel to wack the mice/rats and have them die extremely fast than watch a reptile or snake slowly, painfully starve to death........ Anyway, I LEARNED how to sleep again!
I also worked on my "karma"! lol! I decided to baby the heck out of 6 pet rats. They live in "shangrila" are treated kindly with love, and showered with gifts.. Would you believe I have spent over $600 on RAT SUPPLIES AND GOODIES in only 9 months!
They ARE wonderfull pets!
Rebecca