Phil sets up a video chat with his folks in Florida. When he pans the camera to the tree where the ornament they sent hangs, Claire notices what looks to be a cigarette burn on the sofa. When no one confesses to the couch burning, a frustrated Phil declares they are canceling Christmas. He has a habit of making big pronouncements to the kids. This time, he drags the fully-decorated tree out of the house.
The kids conspire to pull a Spartacus scam. They'll all confess and hope their folks will be so touched that they are protecting each other that they'll bring back Christmas. Luke goes first only to see his sisters stay silent. When it becomes obvious that Luke is lying, Phil says Christmas is still canceled. Alex eventually fesses up to smoking in the house and is grounded for a week. She's bummed about the punishment but happy to hear Phil declare that Christmas is making a comeback.
As the family huddles around the tree, Claire notices the couch is burning after being hit by a sunbeam filtered through the crystal ornament Jay's folks sent. Alex wasn't smoking. She just took the blame to save Christmas. When the kids get on Phil's case for calling them all liars, he tries to deflect their anger by declaring he'll make it up to them with a trip to... hmmmm... Italy? Think he'll follow through? How do you say "no way" in Italian?
While waiting to get Lily's picture taken with Santa, Mitchell and Cameron hear a lovely chorus of Christmas carolers headed their way. Sounds nice, right? Wrong. This particular collection of carolers kicked Cameron out of the group last year. The big guy is still bitter. When Mitchell and Cameron finally get to the front of the line, they complain about the skinny Santa who just came on duty. They decide to wait for the fat Santa.
While packing up the car, Cameron and Mitchell meet Scott, the Santa they dissed inside the mall. Turns out he was fired because a couple of customers complained about his svelte figure. The not-so-jolly fellow is unemployed and living in his car. Cameron feels guilty so he invites the guy over for Christmas Eve dinner. Santa Scott can follow them to their house in his house.
Mitchell and Cameron want to tell Santa Scott that they are the ones who got him fired. But when Scott mentions his violent temper during his days in the Marines, they decide to stay mum. When Cameron's old caroling group shows up at the house, he wants to turn the sprinklers on them. But Santa Scott convinces them that it is better to forgive than seek revenge. After all, he forgave them for getting him fired. Busted!
Cameron takes Santa's advice to heart. He steps outside with some kind words for the carolers. Then Andy, the leader of the coup that ousted Cam, says, "Wow, even your apology is off-key." With that, Santa Scott socks the caustic caroler with a holly-jolly haymaker to the chin. Cameron says, "But what about forgiveness?" Santa Scott responds, "You were nice, he was naughty." Don't you just love a Santa with a solid right hook?
As Manny and a misty-eyed Jay watch Miracle on 34th Street on TV, a hideous, screaming alien monster head pops up on the plasma screen. They must be watching the director's cut. Actually, Manny downloaded a fake copy of the classic holiday film to play a practical joke on Jay. He yells, "Inocente!" Apparently, pulling pranks is a Christmas tradition in Colombia and the one who is fooled is dubbed the "inocente."
Jay wants a traditional Christmas, but Gloria thinks there's room to mix in a few Colombian traditions, too. When Manny suggests they get some fireworks, Jay shoots down the notion. He says that maybe next year they can talk about integrating a little bit of Colombia into the holidays. Manny doesn't buy it. He thinks Jay is trying to take away his whole Christmas.
Gloria and Manny have cooked up some bu ñuelos (aka cheese fritters) as part of their Colombian tradition. This sets Jay off on a rant declaring that they'll do Colombian things when they are in Colombia and American things when they are in America. Gloria and Manny are crushed by his outburst. Then Jay yells, "Inocente!" Yes, he got them good. Looks like it's time to start up some new traditions, which includes setting off the fireworks Jay picked up while doing a little last-minute shopping. Can't wait for New Year's!