The old gentleman is a functional character in the story with whom Saki develops his surprise ending and accomplishes his theme.
Norman Gortsby sits on a bench in Hyde Park, London, as darkness gathers. Although his exact problem is never specified, Gortsby feels very defeated; he is somewhat bitter and cynical. As he watches other people begin to come out into the evening, he makes judgments about them, imagining what their lives are like.
An elderly man shares his bench. Gortsby takes in the old man's less-than-prosperous appearance and labels his circumstances at once:
As [the elderly man] rose to go Gortsby imagined him returning to a home circle where he was snubbed and of no account, or to some bleak lodging where his ability to pay a weekly bill was the beginning and end of the interest he inspired.
Gortsby makes an instant judgment; the old man is poor and lives a difficult life; no one pays attention to him. The old gentleman leaves, only to return at the end of the story to retrieve a small bar of soap that he had lost under the bench.This shows that Gortsby had been right about him. For a single bar of soap to be so important to him, the old man surely lived in poor, desperate circumstances, and Gortsby himself had paid no attention to him as he dropped his soap. Nor did Gortsby even consider that it might have belonged to him.
Ironically, it was this same bar of soap that had convinced Gortney earlier that he had misjudged another character, a young man who had tried to get money from him. After finding the soap, Gortney finds the young man and gives him money. When the old man returns, however, Gortney realizes that he had been right the first time about the young man. He had indeed been a confidence man, a con artist, but by then it was too late. Gortney's money was long gone. He should have trusted his first impression.