Della wanted to buy Jim a nice Christmas gift, but she only had $1.87, even after saving up for months. This was part of the conflict of Della worrying about Jim's opinion of her.
Climax: What Will Jim Think?
Why did you cut off your hair?
I did it for you! Don't you still like me without my hair?
Della finds a solution to her money problem by selling her prized, long hair to earn enough money for Jim's gift. She receives $20 for her hair, which is more than enough for the present.
Falling Action: An Unexpected Surprise
I sold my watch so I could afford these combs for you!
I'm so excited about these combs! My hair grows fast!
After searching for a gift, Della bought the perfect chain for Jim's pocket watch, which is his most prized possession. She bought it, and she still had 87 cents left over. She was excited that she got a good gift, but she was worried about what Jim would think of her hair.
Resolution: Gifts of the Magi
We are like the Magi!
This is going to be a great Christmas!
When Jim arrives home, he was shocked by the sight of Della's new haircut. Della begged Jim to still like her even though her hair is so short. Jim was so surprised because Della couldn't use the combs he bought her until her hair grew back.
Della and Jim gave each other their gifts. Della found out that Jim sold his watch so that he could afford the combs she has always wanted. They both realized they had sacrificed what meant most to them for the other, so both of the gifts were actually impractical. They were still happy because it's the thought that counts.
The theme is displayed in the resolution because they both realized that the gift isn't what matters, it's about the person who gives it and the thought they put into the gift. They sat down and enjoyed dinner together.