The story begins on Christmas Eve, with Della lamenting the fact that she’s only saved $1.87, despite months of pinching pennies at the grocer, butcher, and vegetable man. She flops down on their shabby couch and cries, while the narrator goes on to introduce the young couple, Della and Jim Dillingham Young. The narrator then describes their apartment, remarking upon its cheapness—8 dollars a week—and lack of a working doorbell.
This first section of the story focuses on how little the Dillingham Youngs have of external or material value. Della has saved only $1.87 after months of effort, and the apartment they live in is shabby and broken—there is nothing beautiful in their life at first glance.
Della stops crying but is still at a loss for how she might buy a Christmas present worthy of Jim. She suddenly remembers the pier-glass—a sort of thin mirror between the windows of the apartment—and stands before the glass, releasing her hair to fall to its full length. Here, the narrator describes the couple’s most prized possessions: Della’s long, brown hair that falls below her knees and Jim’s gold watch that was passed down from his grandfather. He compares these items to King Solomon’s treasures and the queen of Sheba’s jewels.
The narrator shows that value is subjective when he compares Della’s hair and Jim’s watch to the treasures of King Solomon and the queen of Sheba—these items are clearly not equally valuable, but to Della and Jim, their prized possessions mean just as much as the mythical jewels the narrator alludes to. Della also demonstrates that her main concern with their poverty revolves around how it limits her ability to show her love for Jim. Also note that Della’s hair here represents her own external beauty and youth.
Della runs downstairs onto the street, where she finds a hair shop run by a Madame Sofronie. After a brief exchange during which Madame Sofronie evaluates Della’s hair, Della sells her long locks for twenty dollars.
Madame Sofronie’s cold evaluation of the dollar value of Della’s hair directly contrasts with its value to Della and Jim. To Madame Sofronie, it’s worth no more than the money she can get for it. To them it is worth so much more than that. Della demonstrates her love for Jim by sacrificing her own most prized possession—and external beauty—without a second thought.
Della spends the next two hours looking for a perfect present for Jim. She decides finally on a simple platinum chain for Jim’s watch, comparing the watch’s lack of ornamentation and value to Jim’s personality, which is equally quiet and valuable.
The watch’s substance is more important to Della than its lack of ornamentation—just as Jim’s inner worth means more than his salary or quiet manner.
Della returns home to fix her hair into curls and prepare dinner before waiting for Jim at the door. She says a little prayer hoping that Jim will still find her pretty without her long hair.
Everything Della does is out of love for Jim. Here, she worries for a moment that her sacrifice of external beauty will affect how Jim feels towards her or that Jim won’t have wanted her to make the sacrifice.
When Jim enters the door, he freezes, staring at Della’s hair without expression. Della runs to Jim and tells him that she had her hair cut and sold in order to buy him a Christmas present. Jim continues to stare, and Della repeats that her hair is gone—but that her love for him is immeasurable. Jim finally moves, giving Della a hug and throwing a package on the table. He reassures her that no haircut could make him like her any less, but that he was shocked because of the present he bought for her.
Both Jim and Della express their love for each other—Jim says that Della’s external changes wouldn’t budge his love for her. Her sacrifice and generosity make him value her more.
Della opens the package to find the beautiful tortoiseshell combs that she had coveted for her hair. She shrieks in joy before crying, and Jim comforts her before she remembers her own present to Jim. She pulls out the watch chain and asks to see Jim’s watch so that she might try the chain on it.
The combs are beautiful and expensive on the outside—but with Della’s hair gone, their external value is diminished. However, they still have the same sentimental value, coming from Jim.
Jim flops down on the couch and smiles, saying that they should put their presents away for now and that they’re too nice to use just yet—before admitting that he sold the watch to buy the combs for Della. They decide to have dinner, and the narrator sums up the story with a little paragraph on the magi. He describes them as wise men who invented the art of giving Christmas presents, and he compares Jim and Della to the magi—saying that of all who give gifts, these two are the wisest.
It’s revealed that Jim made his own similar sacrifice in order to buy the combs for Della. The narrator’s paragraph on the magi suggests that the true spirit of giving involves sacrifice and generosity and that the intent counts more than the external value of the gift—which is why, he says, Della and Jim are the wisest gift givers. Although their presents are useless, they’ve demonstrated, through sacrifice, their great love for one another. They have, in effect, given each other the greatest affirmation they could of each other’s love.