Nevertheless, the Word of God supplies us with a definition of χάρις, so that there can be no confusion as to the Lord's meaning. Ephesians 2:7-9 gives us the meaning of "grace":
"That in the ages to come He might shew the exceeding riches of His grace in His kindness toward us through Christ Jesus. For by grace are ye saved through faith; and that not of yourselves: it is the gift of God: Not of works, lest any man should boast."
The first fact in defining "grace," is that it is an attribute of God! He is gracious! Like "mercy," "grace" is evidence of God's love for us. The two explain just how much God "loved the world" and what that means in John 3:16.
The second truth about God's "grace" toward mankind, is that it cannot be earned. It has to be a gift, or it is no longer "grace." The two are contrasted as opposites in Romans 11:16, which says, "And if by grace, then is it no more of works: otherwise grace is no more grace. But if it be of works, then is it no more grace: otherwise work is no more work."
Finally, the text itself declares that salvation is a "gift!" And just like you and I purchase what we give as gifts to others, salvation is a "gift" purchased by God, to give it to us: the price? The life of His only begotten Son (Rom. 5:15)!
At Christmas time, we honor God's gift to mankind: our Lord, His Son!
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