We can answer this question in a few ways.
From one perspective, we can say that the conflict rests on poverty. Della and Jim are a loving couple, but they do not have enough money. So, when Christmas comes around, they cannot buy a gift that reflects their love for one another. So, they are frustrated, particularly Della.
As the story progresses, Della and Jim come up with a plan independently. Della decides to sell her hair to buy Jim a chain for his watch. Jim decides to sell his watch to buy combs for Della's flowing hair. As you can see, in the end, they both have gifts that cannot be used. From this perspective, the conflict is outdoing each other in love. This type of conflict is beautiful. This is why O. Henry calls them wise and why he calls the story, "The Gift of the Magi."
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