As the Simpsons finish Thanksgiving dinner, and strain their necks to see Krusty celebrating the holiday on television, Homer unbuckles his belt and declares the holiday over. He decides it’s time to focus on the next holiday: Christmas. After the family finishes decorating the house, Homer and his colleagues exchange presents. Homer’s “Secret Santa” turns out to be Carl, who gives him a boxed set of Magnum, P.I. DVDs. Homer is thrilled. When Homer realizes he’s Lenny’s “Secret Santa,” he puts some money in a vending machine and buys him some Certs candy. Lenny calls Homer the most selfish man he knows. A short time later Mr. Burns starts handing out Christmas bonuses: five-dollar cafeteria vouchers. He gives Homer an old baseball card, thinking it’s worthless. Homer takes the Joe DiMaggio card to the Comic Book guy, who gives him all the money he has in exchange for the valuable card. When Homer returns home he tells his family that they’re going shopping at the Springfield Heights Promenade, the ritziest mall in town. Homer divvies up the cash from the baseball card sale so everyone can buy gifts for each other, and he promises to buy a huge Christmas tree when they’re through. Unfortunately Homer happens upon a personalized, talking Astrolab during his shopping trip. Homer falls in love with the expensive device, which does little more than dispense useless information. Homer spends all his money on it. When Bart reminds him about the big Christmas tree he promised the family, Homer does some quick thinking. He drives to a seedy Christmas tree lot in a bad part of town and buys a bone-dry tree. Marge asks Homer if there’s something he’s not telling her. Suddenly the sound of the talking Astrolab can be heard behind a chair. Marge pulls out the device, which has been gift-wrapped and sports Homer’s name. Lisa accuses Homer of being selfish. Homer hangs his head in shame.

Marge tells Homer that Christmas is a time to think of others, and punishes him by making him sleep on the couch. That night Homer watches an animated Christmas special called “Mr. McGrew’s Christmas Carol.” Homer is unfamiliar with the classic Dickens tale (A Christmas Carol), and when he awakens the next morning, he tells the kids he still has time to reform his ways. Soon after, Homer travels about town dispensing gifts to people. He gives Apu a squishee; Lenny a photo cube featuring him and his co-workers; diverts power meant for Las Vegas to a poor area of town; and even manages to outdo Flanders with the collection basket at church. Flanders’ face reddens when he realizes Homer bested him. He even converts the backyard into an elaborate ice rink, where people from throughout town can skate. Meanwhile Flanders begins to realize that those normally in need have disappeared. He makes his way to Homer’s yard… and can’t believe his eyes. Flanders can only listen helplessly as someone tells Homer he’s the nicest guy in town.

When a pregnant woman shows up at Flanders’ doorstep looking for help, Flanders gets excited. Then it turns out she was looking for Homer’s house. Flanders shuts the door, and vows to fight back by doing good. He sets out to give everyone in town a present. Homer determines to one-up Flanders by purchasing everyone a car. Lisa tells him that Christmas has become too materialistic, and people would be happier without gifts. Homer takes Lisa’s advice literally, and on Christmas Eve, sets out to steal all the presents in town. When townspeople wake up the next morning and discover that all the gifts have been stolen, they set out to find the culprit. A mob spots Homer’s car, which is loaded up with a huge pile of stolen presents. They angrily pelt Homer with snowballs. Flanders steps forward and says that he may have been wrong to give out so many presents. Flanders takes out his bible and begins to read from scripture as a bright light shines in the east (it turns out that Hans Moleman fired a flare after overturning his car on mountain road). When Mayor Quimby forbids Flanders from praying on city property, Homer sums things up in a secular way. Then Homer and Flanders start tossing the gifts back to the happy townspeople.