Muffy gets a visit from her cousin Mort from the farm but they can't seem to agree on anything: First they have an argument about which life is better, country or city. This starts a rift between them and they don't want to speak to each other. So the others try to get them to make up.

Jodie receives a box of safety tips and mannequins from the police station. And after her display is mysteriously ruined, and other departments are messes, they all think there is an intruder in the store. After Sam plays detective without much luck, they call the police, and Officer Hardy comes to the store to solve the case and gets very confused when he sees Muffy's mouse hole and discovers that Jeff is a mannequin. Finally they catch the crook who turns out to be the police station's mascot who stowed away in the box from the police station.

The store has a new visitor, Karen (Jennifer VanderBurgh), a young girl whom Jodie is looking after while her parents are busy moving their stuff out of their house to a new city. Karen is very sad about moving away because she will miss all her friends but Jeff, Jodie, Sam and Muffy cheer her up.

Jeff has never cried a real tear before and goes to great lengths to cry: from pretending, to smelling onions, to Sam and Muffy tickling his face, without much luck. Jodie explains to Jeff that crying is a feeling and is more that tears. Finally Jodie tells a story that is so sad it makes Jeff cry.

On Christmas Eve, Jeff was brought to life because he didn't want to miss Christmas. But Sam, Muffy and Jodie knew that he was going to be alone in the store. So after leaving him, Jeff decides to decorate the biggest Christmas tree. Jodie returns and so does Muffy. Sam tries to get in but he left his wallet and keys in the store. So after trying to call Jeff to let him in, he is taken away by the police. Meanwhile, two of Santa's elves are loose in the store and Muffy tries to catch one (since everyone knows if you catch one and let it go, they give you a wish) but the elves out smart them and deliver Sam's wallet and keys to the police station and after proving who he is, the police let him go and he gets back to the store in time to spend Christmas with Jeff.

The store is being torn down the next day, and Jeff, Jodie, Sam and Muffy are spending their last day in the store packing, and feeling a bit sad that they'll have to go their separate ways. They then start reliving old memories and we hear how Muffy came to the store: after her old house was torn down. We also see how Sam came to the store: When he retired from the merchant marines, he met Jodie in the park and they ended up getting jobs in the store. In all this, Jodie discovers that the only way to save the store is to find a historic plaque to see how old it is, but there aren't any records of it and TXL doesn't even know where it is.

The plaque is behind Muffy's wall but she didn't notice. Meanwhile, They still relive old memories and we see how Jeff came to the store: Waldo the Magnificent was practicing magic on a magic hat that flew away to a mannequin factory and landed on a mannequin that had a matching vest, That mannequin was taken to the store for Jodie's display and Waldo brought it to life and named him Jeff. Meanwhile, Muffy found the plaque and took a picture of it, and Jodie only had 30 minutes to run to head office to give it to her boss, and just made it. The store was saved.

Jeff, Sam and Jodie are waiting for Jodie to get back from her aunt Margaret's. She took a shortcut and got lost and her car broke down. So she went to a service station for help. Meanwhile, Jeff has his usual blues about not being able to leave the store, and Muffy tries to enter the store's contest to win a trip around the world. But store employees can't enter the contest.

Coop Scoop, a newspaper reporter comes to the store to do a story about the night staff. And Sam is very eager to have Coop look at his diary from when he was at sea to do a story about it. But Coop explains that the newspaper is about what's going on in the present, not the past. Meanwhile, Muffy is disgusted about what is written about mice and wants retraction. Also, Coop came very close to finding out about Jeff's magic hat, which could be dangerous if the word got out.

Jodie has prepared a special dinner for everyone and has brought it to the store along with a big bag of cookies she is taking to her nephew Davy's birthday party. But when she takes the dinner up to the roof with Muffy, Sam and Jeff thinks that the bag on the counter, the bag of cookies, is their dinner. So after eating all the cookies, Sam and Jeff don't feel too well and Jodie is a little upset about it, but isn't angry. So the others decide to make it up for her by giving and making some cookies to take with her.

The store is having a dinosaur-coloring contest and the prize is 2 free museum tickets and $100. The gang decides to enter but since there aren't enough poster boards, Jeff and Jodie team up, and Sam and Muffy team up. Muffy is so eager to win, that she is mean to Sam, insults his drawing and attempts to cheat. But her better judgment eventually comes through and everything turns out all right.

Waldo the Magnificent arrives in the store with a bad case of shrinkitis - whenever he sneezes, he shrinks. He needs a special potion to cure him that can only be gotten in ""potion land"". So while Muffy takes care of Waldo in the store, a magic genie sends Jeff, Jodie and Sam to potion land where they face a giant lizard, and go to a haunted castle. Everything scares Jodie and Sam but Jeff will not give up since he owes his life to Waldo. They eventually get the potion in the castle dungeon and make it back just in time.

With very much talk of imagination, everyone uses some of theirs, but Sam discovers that there is someone on the roof and the camera up there is broken and TXL can't show him what's up there. So they later go see what it is, and discover it's the ""Elephant Show's"" singing group, Sharon, Lois and Bram who were practicing.

It's a cold night in the store and just as Sam's about to turn on the heat (using TXL, who controls the heat), Muffy accidentally spills Sam's hot chocolate on TXL's keyboard and now Sam can't turn the heat on. So everyone must ""think warm"" to stay warm.

Sam's friend Sour Puss Sal, who hasn't smiled in almost 20 years, is coming to visit him in the store. Everyone goes to great lengths to make her smile without much success until Jeff has a foolproof plan.

Sam comes into the Children's Department with a piece of string tied around his finger to remember something - but forgot. He forgot to pick up Jodie's display racks and Jodie gets angry and snaps at Sam. So Sam, Jeff and Muffy decide to make her display out of string to surprise her and so Sam could apologize. But Jodie felt guilty already for snapping at Sam.

Jodie's display of the old-wild west sets off a lot on this subject as Jeff is dressed as a cowboy for the next day, Muffy challenges Penelope to a showdown, and Sam receives a note from Big Killer Jake saying that he'll be there at midnight.

While Jodie is setting up her display on space and the sky, Muffy is on the roof star-gazing when all of the sudden, a spaceship land there with an alien who is a mouse like Muffy. His name is XL7Z Fred from Squeakonia who is looking for cheddar cheese. But when Sam, Jeff and Muffy meet him, they think it's Muffy playing a trick on them. Fred wants to take Muffy back to Squeakonia with her but she couldn't leave her friends. Later, when Jeff, Sam and Muffy discover that there really is a Fred, they think that Muffy is leaving them.

Jodie and Sam are practicing playing the piano for a show they're suppose to do and Muffy is upset when she is not included. So she tries some of Waldo's magic spells on cheese and says the words backwards she is impressed when the cheese grow big. But when she tries another one, she freezes Sam and Jodie (like mannequins) and Jeff finds out. But they must work together to break the spell by playing a group of musical notes on the piano to unfreeze them.

Everyone is back for Christmas but the elves play another trick: they hide all the presents so they all go on a gift hunt to find them. Jodie's present is found first under a tree in the hall; Sam's present is found under the tree in his own computer room; Muffy's present appears in the children's department; and Jeff's present is found on the roof; Jodie got a pop-up-book of ""A Christmas Present for Jack Frost"" which they turn into an opera; Sam got new underwear; Muffy got a big statue of a mouse-elf made of cheese; and Jeff got a new telescope.