O. Henry’s story “The Gift of the Magi” is frequently taught as an example of irony. Specifically, it uses situational irony to leave the reader with a surprise ending, which we sometimes call an “ironic twist.”
The point of the story is that a young couple, Della and Jim, each struggle to find a way to buy each other a meaningful Christmas gift. They each end up buying each other something to complement their own favorite possessions. For Della, this is a set of combs for her long, beautiful hair. For Jim, it is a chain for his prized pocket watch. Unbeknownst to them, each has sold his/her favorite possession to earn money to buy their present for the other. So when Jim presents the combs to Della, her hair is cropped short, and when Della gives him the watch chain, he has no watch.
The problem with these sorts of endings is that, while they are interesting the first time you read them, they don’t usually lend themselves to meaningful characterization or theme development. The writer’s primary focus is to surprise the reader, and everything in the story works toward that end. I would rather see an ending that more faithfully reflects real life.
Suppose only one of the characters sacrificed their favorite possession for the other’s Christmas gift. Suppose Della still cut her hair to buy Jim the watch chain, but Jim bought something other than the combs for Della, something nice but inexpensive that fell within their restricted budget. This would set up an ending in which one character, Jim, realizes the depth of the other character’s love and devotion. The way the original story ends now the characters smile at the situation and then O. Henry ends with the anecdote about the Magi. The new ending would not be as “happy,” because Jim would feel that he had not sacrificed as Della had, but it would be a revelation to him, and that would be more important.
I would also remove the concluding anecdote about the Magi. In O. Henry’s day such an authorial intrusion was more common and acceptable, but to today’s readers it often sounds too much like moralizing or preaching.