It is Christmas Eve, and after months of parsimony, young housewife Della has only saved $1.87 to buy her husband, Jim, a quality present. After agonizing over her lack of money, Della examines her reflection in the pier-glass of her and Jim’s shabby, worn-down apartment. The narrator reveals that Della and Jim take immense pride in two of their belongings: Della’s long, beautiful hair that falls below her knees, and Jim’s golden watch passed down from his grandfather. We also learn that Jim's limited earnings of $20 a week do not threaten Della's love for Jim and happiness with her marriage.
Della rushes to a nearby hair shop, where she sells her hair for $20. She buys Jim a fob watch chain after hours of searching in various shops. The chain's simplicity and understated appearance fondly reminds Della of Jim’s own quiet and lovable demeanor.
When Della arrives home, she gazes at her new haircut, which makes her look like a “truant schoolboy” (11). She begins to fret that Jim will no longer find her attractive. When the thin, gloveless, and solemn-looking Jim walks into the apartment, he stares at Della’s hair with a puzzled expression on his face. Della explains that she sold her hair to buy him a worthy Christmas present.
Jim awakes from his trance and places a package on the table. After assuring Della that no haircut could reduce his love for her, Jim invites Della to unwrap the package so she can understand his shocked reaction to her haircut. Della opens the package, only to discover that Jim has purchased a set of beautiful, jeweled combs. After shrieking in excitement, Della begins to cry, realizing that she cannot use the combs on her new, short haircut. Jim comforts Della, who then presents the chain and asks to see Jim's watch so they can see how the chain fits with it. Jim collapses to the couch and smiles, suggesting that they should put their Christmas presents away for now, for they are “too nice to use just at present” (15). He admits that he sold his watch to purchase Della’s combs.
The narrator concludes the story with an allusion to the magi—the biblical figures who offered Jesus presents on the night of his birth. According to the narrator, Della and Jim are the wisest out of all gift-givers: “They are the magi” (16).
