In one embodiment, a service function forwarder (SFF) analyzes pre-service state and post-service state of an original packet to determine whether to initiate and perform service offload or service bypass. A service function forwarder (SFF) receives a particular packet having a service function chain (SFC) encapsulation of the original packet, the SFC encapsulation identifying a particular service function path (SFP) designating a particular service function (SF). The SFF extracts pre-service state of the original packet, typically adding it to the particular packet in an In-Situ Operations, Administration, and Maintenance (IOAM) data field (or alternatively storing locally) before sending the particular packet to the particular SF. The SFF receives the particular packet after the SF applies the particular network service. In response to analyzing pre-service state and post-service state by the SFF, the SFF may perform service bypass or service offload for subsequently received packets identifying the same particular SFP.