Richie's decision to bring Ben, a homeless man, home for Christmas lands him in serious trouble with Carl and upsets his family. However, Ben has a lot of lessons that he teaches about the meaning of the season. As time wore on, the family start appreciating them.
Meanwhile, Laura is distraught after Eddie accidentally tosses her cherished childhood rag doll, Emily, to the dump. She tells him there was a reason why she put her next to her bed, not in the box and blames him for ruining her Christmas. She kept refusing to talk to him until he finds her. Immediately, Steve finds out how much she's distraught and heartbroken over losing her, that he sets Eddie straight for his lame-brained decision in tossing her out as a result. Steve tells him that had he not tossed her out, she would've looked forward to Christmas. Then, he heads down to the dump to find her and make Laura happy again as his Christmas gift to her.
At the house, Ben reveals to Carl that he is really Santa Claus disguised as a homeless man and explains why he did give him and his family the lessons. He wanted to find a family who understood the true meaning of Christmas and found success with them. He apologizes to him for not getting him the gift that he wanted.
At the dump, Steve teams up with a friendly dog named Howard, and they search high and low for Emily. Steve gets distracted by a nudie magazine, but Howard barks at him as a reminder to find her. Together it took 16 hours to do so, but they managed it.
On Christmas Day, Harriette and the rest of the family are happily opening presents. However, Laura still feels distraught and heartsick over the loss of Emily. Steve comes over and he gives Emily back to her as her Christmas gift. He tells her that he got Emily because he loves her and would do anything for her. She's real happy that he found her and thanks him for saving her Christmas by hugging him. Carl finally gets the gift that he wanted when he was a boy from Santa. Then they extend their holiday cheer to Steve and Howard.
- "Have Yourself a Merry Winslow Christmas"
- "It's Beginning to Look a Lot Like Urkel"
- "Christmas is Where the Heart is"
- "Fa La La La Laagghh!"
- "It Came Upon a Midnight Clear"
- "Deck the Malls"