About Kaparot the Shulchan Aruch says: “One should not partake in this custom” (שו”ע או”ח ס’ תר”ה). On the first publication of the Shulchan Aruch, the headline in section 605 was “the custom of kapparot on Yom Kippur eve is a foolish custom.” Later publications removed “foolish custom.” It also said, “it should be stopped.”
The Rashba (שו”ת הרשב”א, א סימן שצ”ה) and Nachmanides (כמובא בבית יוסף אורח חיים סימן תר”ה) objected to this custom as well and Maimonides did not even mention it so therefore it was not practiced in Yemen.
Rabbi Haim David Halevi who wrote the Kitzur Shulchan Aruch said: “Why should we, on the eve of the holy day, be cruel to animals, without a reason and slaughter them without compassion, at the same time we’re asking God to judge us for life?” (שו”ת עשה לך רב, חלק ג, כ)
“Sit and do nothing is the preferred course” – this is a term in Talmud which is used to decide the halacha when there’s a doubt. Rabbi Eliezer Papo in his book “Pele Yoetz” explains it very well: “In some things abstention is very good, such as anything that may make you concerned that there is a one percent chance for an sin, and there’s no clear mitzvah, sit and do nothing is the preferred course.”
The kaparot custom of using chickens is not a mitzvah but a custom of a very small group. There is nothing about it “that may make you concerned that there is a one percent chance for an sin” but instead a very clear cut sin of animal suffering (tzar ba’alei chayim). The suffering of the chickens starts with the very tiny cages they are confined to, continues with their transport to the market in tiny cages without any food or water, and later being kept waiting in very harsh conditions. We find that in of our desire to perform a custom, we end up engaging in an sin.
The use of chickens for this custom is entirely psychological rather than for religious reasons.