bumbling kidnappers, Bill Driscoll and the narrator, are going to try to get $2000 in ransom for a fraud scheme up in Illinois.  They select the son of a well-to-do mortgage broker, who they expect will pay every dime of the $2000 that they need.  Their first hint that this might not go well should have been when they pick up the kid while he's throwing rocks at a kitten in the street, after which he gets Bill in the eye with a piece of brick.  What follows is one headache after another trying to manage this hard to manage kid--until finally, in the ultimate humourous irony, Driscoll and the narrator give up.  The kid's father not only won't pay them ransom, but helpfully offers to take him off their hands only if THEY pay HIM $250, which they do at once, as they absolutely cannot take another minute with the little thug. 

When the narrator and Bill Driscoll select their kidnapping victim, Johnny, the son of prominent citizen Ebenezer Dorset, they anticipate some quick, easy money from their ransom demand of two thousand dollars. After spending some time with the boy, these criminals reduce the ransom to fifteen hundred dollars because they figure it isn't fair to ask for so much for a "forty-pound chunk of freckled wildcat." To reduce the ransom based on the boy's behavior is both ironic and humorous, as is the fact that Johnny is both enjoying his captivity and mistreating his kidnappers.

The main irony in the story is that, instead of receiving any ransom money at all, the narrator and Bill end up having to meet Ebenezer Driscoll's demand for $250 to take the boy back. Johnny Dorset is such a handful that his kidnappers eagerly take the counter-demand just to get the boy off their hands. It is ironic that two adult criminals are no match for a small boy, and both their desperation to be rid of him and his father's demand are quite humorous.

My favorite use of irony in "The Ransom of Red Chief" is the verbal irony that happens at the end of Bill and Sam's letter to Ebenezer Dorset.  

These terms are final, and if you do not accede to them no further communication will be attempted.
Two Desperate Men.

Remember that Bill and Sam are two "hardened" criminals that have kidnapped a child.  They are dangerous men presumably because they are desperate enough to try anything . . . including kidnapping. At least that's the message that would be sent if the kidnappers were anybody other than Bill and Sam and the victim was anybody other than Johnny Dorset.  In this case, Bill and Sam are desperate to get rid of Johnny.  They are at their wits end.  They are scared of Johnny and desperate to escape his enthusiasm.  

The other irony that is humorous to me is situational irony.  I mentioned before that Bill and Sam are criminals that are willing to kidnap a young boy.  They should be cruel enough to control and scare little Johnny Dorset.  That's what readers would expect to happen; however, the absolute opposite is what happens. Bill and Sam actually cower from Johnny and have zero control over this kid.  Ironically enough, they don't get any ransom money.  In fact Bill and Sam end up paying Ebenzer to take his kid back.  So for all of their trouble, Bill and Sam actually lost money.  That story is hilarious, because everything that happens is ironic.  

The narrator of "The Ransom of Red Chief" himself expresses the situationalirony in O. Henry's story: "It looked like a good thing, but wait till I tell you." For, what happens to Sam and especially Bill is deliberately contrary to what they expect and very amusing to readers. They believe the kidnapping of Summit, Alabama's wealthiest man's son should profit them; however, they end up paying the man to take the rapscallion back because the boy "put up a fight like a welterweight cinnamon bear," and later as he pretends to be "Red Chief," he nearly scalps Bill.

In further irony of situation, instead of being frightened by being captured, the boy "seemed to be having the time of his life," talking incessantly during the evening by the campfire as the two men tried to enjoy their meals. When Sam asks the boy if he would like to go home, Red Chief unexpectedly replies that he has no fun at home and hates school and is having a great time camping out with them.

It is a restless sleep that the two men have because Red Chief who lies between them imagines that he hears things and jumps up, reaching for his toy rifle. Early in the morning Sam goes to the peak of the "little mountain" to survey the vicinity:

Over toward Summit I expected to see the sturdy peasants of the village armed with scythes and pitchforks beating the countryside for the dastardly kidnappers. But what I saw was a peaceful landscape dotted with one man plowing with a mule.

Ironically, no one is even searching for the boy. So, Sam and Bill work on a plan for demanding two thousand dollars until Red Chief strikes a blow to Bill's head with his sling shot. In an example of verbal irony, Bill asks Sam,

“Sam, do you know who my favorite Biblical character is?”
“Take it easy,” says I. “You’ll come to your senses presently.” 
“King Herod,” says he. “You won’t go away and leave me here alone, will you, Sam?”

The greatest example of irony of situation is the failure of the ransom note to produce the intended results. Instead Ebenezer Dorset replies that he is willing to take his son back if the "two desperate men" will pay him two hundred and fifty dollars and bring the boy in the dark. Bill ironically says he thinks Dorset's offer is "spendthrift" and they should pay it. Sam, too, answers with verbal irony, calling the horribly mischievous boy a "lamb":

“Tell you the truth, Bill,” says I, “this little lamb has somewhat got on my nerves, too.

So, in irony of situation, the exhausted con-men return Red Chief to their father and Sam has trouble catching up to the fleeing Bill.

That theme is easily conveyed by how completely the child destroys the two would-be criminal kidnappers.  The reader is never really under the impression that Bill and Sam are that competent, but to their credit they are able to pull off the actual kidnapping of Johnny.  

Their error comes in assuming that little Johnny will behave like a good, scared little kidnapping victim.  Little Johnny thinks it's great fun that he has these two men all to himself to play his make-believe Indian games with.  At one point in the story, Sam leaves Bill alone with Johnny.  When Sam comes back O'Henry writes "Bill's spirit was broken," as well it should be since Johnny did all manner of crazy things to Bill.  Bill is so broken and scared of Johnny that Sam is forced to move up the kidnapping time table and ask for less money. 

Johnny's dad isn't having anything to do with paying to get his kid back. Instead he tells Bill and Sam that they can pay HIM to take Johnny back home.  By this point, Bill and Sam have completely had it, so they drop off Johnny, pay the dad, and run out of town. 

O'Henry conveys his theme that kids shouldn't be underestimated by giving the reader a heavy dose of situational irony. The reader expects the kidnappers to be hardened criminals. They are not. The are blundering fools (think Home Alone).  The reader thinks they should get their money in the end.  They do not.  The reader thinks that Johnny should be scared. He is not.  The reader thinks that the dad should really want his kid back.  He does not.  Johnny shows the reader that he should not be underestimated for being a kid because he is able to humble and frighten a pair of kidnappers.  He is able to make his own father question whether or not he wants Johnny back. Johnny is most definitely not a weak child waiting to be molded.  He's the one doing the molding to others. 

The main type of irony present in "The Ransom of Red Chief" is situational irony. This is the type of irony that the story ends with as well. Situational irony occurs when there is a discrepancy between what you think will happen and what actually happens.  

When the story begins, readers are presented with the criminals of Bill and Sam. We do not have any major reason to suspect that they are bumbling fools, so we assume that they are fairly hardened and competent criminals. They are planning a "fraudulent town-lot scheme," and they need some extra start up money to make it happen. They agree that kidnapping is a quick and easy way to make that money. They carefully select a child and family, and readers are given the impression that Bill and Sam know what they are doing.

That impression quickly changes as little Johnny Dorset proceeds to make Bill's life simply horrible. After Sam gets back from one of his errands, Bill is practically begging Sam to return the child.

“Sam,” says he, “what’s two hundred and fifty dollars, after all? We’ve got the money. One more night of this kid will send me to a bed in Bedlam. Besides being a thorough gentleman, I think Mr. Dorset is a spendthrift for making us such a liberal offer. You ain’t going to let the chance go, are you?”

Bill and Sam do end up returning Johnny to his father, and they do not collect any of the ransom money. That, in and of itself, is ironic; however, what gives the ending of the story even more situational irony is that Bill and Sam end up payingMr. Dorset to take his own child back.  

Just at the moment when I should have been abstracting the fifteen hundred dollars from the box under the tree, according to the original proposition, Bill was counting out two hundred and fifty dollars into Dorset’s hand.

After the exchange is finished, Bill runs out of town and away from little Johnny Dorset. That is not exactly the image of the hardened criminal that readers were initially presented with.  

And, as dark as it was, and as fat as Bill was, and as good a runner as I am, he was a good mile and a half out of Summit before I could catch up with him.

The story "The Ransom of Red Chief" is ironic, in that the outcome is the opposite of what the reader might expect. Two men kidnap the son of a prosperous man in Alabama and expect the father will be grief-stricken when he hears his son has been abducted and that, as a result, he will pay the kidnappers at least $2,000. From the beginning of their abduction of the boy, who calls himself Red Chief, everything goes contrary to the kidnappers' plans. First, the little boy proves to be far more fearsome than the kidnappers. For example, he tries to scalp one of them in his role as an Indian chief. This is ironic because the kidnappers are expected to be scarier than the boy. Second, the boy is not only unafraid of his abduction, he loves being kidnapped and finds the experience far more fun than being at home or school. Therefore, he has no inclination to go home—another form of irony. Finally, the father of the boy tells the kidnappers they have to pay him to convince him to take back the boy. Therefore, in the ultimate ironic twist, the kidnappers wind up paying the father to take the pesky boy back.