Della cuts her hair off. Della says, "Nobody could ever count my love for you." She cut it her hair off because she loves Jim, and wants to buy him a present for Christmas. Jim says, "I don't think there's anything that could make me like my girl any less." Meaning he still loves her no matter whether she has hair or not. Della saves up money to buy Jim a chain for his watch. She gets her hair cut off and uses the money she already had to buy Jim the gift. Della says, "If Jim doesn't kill me before he takes a second look at me, he'll say I look like a Coney Island chorus girl. But what could I do with $1.87" Meaning she actually does cut her hair off. Jim says, "You've cut off your hair?" He was shocked that she had her hair cut.
