The narrative style in The Gift of the Magi is third person, limited omniscient. The story seems to follow only Delia, giving us a detailed view of what she is thinking and doing, but the reader never knows what Jim, her husband is thinking, for example, we can't predict what Jim will say about his wife's short hair.
"It is almost as if the narrator is an additional character that is heard, but never seen, engaging the reader as a friend and sharing his insights into the Youngs' situation. The narrator tells the story in a joking, neighborly way, with several funny asides directed at the reader."
The narrator in this story by O Henry can almost be viewed as a storyteller, spending time with the reader to impart the moral lesson that the story tells. Because this story focuses on Christmas and the idea of giving gifts to loved ones, you can almost imagine the narrator as a grandfatherly figure who surrounded by children, listening to his every word, tells a beautiful story about selfless love, sounds a little like Santa.