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favoritethings eNotes educator| Certified Educator

In the very last few lines of the story, the narrator justifies the title:

Of all who give gifts, these two were the most wise.  Of all who give and receive gifts, such as they are the most wise.  Everywhere they are the wise ones.  They are the magi.
He has said that the original magi were "wonderfully wise men," so it stands to reason that their gifts would be wise gifts as well.  The "two children" of this story are not wise, at least in the typical sense of the word, because they sold their most prized possessions in order to purchase a gift for the other.  In a way, it is unwise to part with the object dearest to you.  However, these "children" are even more wise than the magi because they had to realize something the magi did not: that the person they love is far more precious than any object, however meaningful, could ever be.  The magi were kings and did not have to make a personal sacrifice in order to express their love to the Christ child; as rich kings, they could easily afford whatever expensive gifts they chose to offer.  Jim and Della, on the other hand, each made a personal sacrifice, giving up the only thing each had of any value in order to show their love.  This makes them even wiser than the original wise men; Jim and Della, then, are the true magi.
Kristen Lentz eNotes educator| Certified Educator

The title "The Gift of the Magi" is a biblical allusion to the wisemen who visit Christ and bring gifts like gold and spices.  The heart of the story by O. Henry is the idea of gift giving at Christmas time.  In the final moments of the story, O. Henry clarifies the significance of the title:

The magi, as you know, were wise men—wonderfully wise men—who brought gifts to the Babe in the manger. They invented the art of giving Christmas presents.

O. Henry makes the argument that although Jim and Della may have acted foolishly, their gifts were selfless.  In both cases, the character sacrificed what they loved to procure something for the person they cared about most.  The title "The Gift of the Magi" reinforces O. Henry's larger theme about gift-giving; the gift itself is not nearly so important as the consideration and love put into it.  The Magi brought gifts to honor newborn Jesus; Jim and Della's gifts also pay tribute to their selfless love.