It's Christmas Eve, and Howard and Joanie trim the tree while Marion sets the table. Marion is upset because Richie won't be there this year. Joanie wants to go to New York next summer with Jenny, but Howard won't let her. Elwood from the hardware store calls and says that he's sick. Howard has to cover for him and takes Joanie with him so that she won't talk to Marion about going to New York. Lori Beth comes in to drop of some gifts and to spend time with Marion before her plane leaves for Seattle where her mother will be picking her up at the airport. Howard and Joanie leave.
At Arnold's, Fonzie supervises Chachi, Jenny, and Roger while they wrap presents for the Pfister Orphanage. Jenny gives Roger a shirt that reads "I LOVE JENNY." Potsie storms in upset about his father making him wear a giant Rudolph head. Al comes in from the kitchen with a box of desserts and his ukulele that he will bring to the Cunninghams. Al leaves and reminds Fonzie to lock up. Fonzie tells Potsie that he'll take him to the Cunninghams.
At the hardware store, Joanie talks to Chachi on the phone. After hanging up, she asks Howard if they can go home. There are no customers in the store, and there is a blizzard outside. Howard is afraid that he may miss out on last-minute Christmas shoppers if they leave. He also says that he and Joanie never talk anymore. Joanie goes to the back room to use the bathroom, runs into some paint cans, and comes out with green paint all over her pink sweater.
At Arnold's, Potsie plays with a paddle-and-ball set. Fonzie gets a call saying the guy from the orphanage can't make it through the snow. Therefore, they will deliver the presents themselves. As they go out the door, the wind blows them back in.
At the hardware store, Howard cleans the paint from Joanie's sweater. Howard opens the door so that they can leave, but the drifts are up to his eyes.
At the house, Lori Beth and Marion look at a family photo album while Al looks on. Howard calls and says that they're snowed in at the store. Marion realizes that, now, nobody is going to be there for Christmas.
At the store, Joanie talks on the phone with Chachi again. Howard takes the phone and asks Chachi to put Fonzie on. Suddenly, the phone is dead. Soon after, the power goes out.
At the house, Marion and Lori Beth continue to look at the photo album under candlelight. Al starts playing "Silent Night" on his ukulele and switches to "Jingle Bells." Marion is still upset that her family isn't there with her. The sound of broken glass is heard upstairs, and Al thinks it is the Christmas Lunatic. He goes up to see what happened. He comes back down holding a bird and goes into the kitchen to give it some bread crumbs.
At the store, Howard and Joanie talk over a Baby Ruth candy bar. Howard talks about how he got to see Babe Ruth play in New York in 1933 when he was 18 years old. He says that he ran away from home because his parents wouldn't let him go. He says that he and his friend slept in boxcars where they had their money and food stolen by bums. He got a job selling hot dogs at Yankee Stadium. Joanie, again, asks Howard if she can go to New York. He says he'll talk it over with Marion.
At Arnold's, Potsie continues to complain about how his father treats him. Fonzie tells a story about a kid he knew once at Christmas time. The kid, Augie, paid someone to be his father at a father-son assembly. Fonzie says that he thinks Augie would love to be a reindeer if his father was around to ask him. Potsie remembers a time where his father stood up after a performance of his and lead the applause. He says that maybe he's been too hard on his father. Fonzie puts on Santa's suit and leaves with an idea.
At the house, Marion says that the turkey has dried out as the lights come back on. She realizes that Christmas is about feelings and thoughts and love and that, although it would be nice, everyone doesn't need to be together for that. Everyone from the store and Arnold's arrives at the house. It turns out that Fonzie knows a girl that drives a snowplow. They all sing "Deck the Hall" as Al plays the ukulele. The camera focuses in on a present under the tree that reads "Merry Christmas."
Al thanks Marion for a wonderful Christmas. Marion says that there are many men that would have gone upstairs at the sound of broken glass, but few that would sit up all night with a sick bird. The phone rings, and Richie has finally called. They all wish him a merry Christmas.