When Bart complains he never gets any mail, Marge gives him the family's junk mail. One piece contains a credit card application, which Bart fills out under the name of his dog Santa's Little Helper, whom he claims to have the occupation "butt doctor". The company misreads the name as "Santos L. Halper", and the credit card application is approved. Before long, Bart receives a credit card. Bart goes on a shopping spree, buying the family some very expensive gifts from a mail order catalog: Vancouver smoked salmon and a radio-frying pan for Marge, a golf shirt with corporate logo for Homer, "Trucker's Choice Stay-Alert Capsules" for Lisa and many things for himself. The item that Bart anticipates the most is a finely-bred, pre-trained collie. Not letting its US$1,200 purchase price stand in the way, Bart promptly orders one. Upon its arrival Bart learns the dog's name is Laddie, who has been trained to perform a wide variety of tasks. The rest of the family fall in love with the new dog, while Santa's Little Helper goes unnoticed.
Bart fails to pay off "Santos L. Halper's" credit card bill, and it is not long before he gets a call from a debt collection agency demanding payment. When the calls and collection letters persist, Bart enlists Laddie to help him bury his ill-gotten credit card. Later, repo men arrive to take back all of the things Bart has purchased. Lisa demands an explanation, and Bart is forced to admit the truth. When a repossessor demands the $1,200 collie be returned, Bart identifies Santa's Little Helper as the dog he purchased. The greyhound is herded into the truck and Bart sadly watches as it drives away. Noticing that Santa's Little Helper is gone, the family begins to bond with Laddie, except for Bart, who fears for Santa's Little Helper's fate. When an exhausted Bart gives Laddie yet another walk, the collie saves the life of Baby Gerald. At the ceremony honoring Laddie's heroism, Chief Wiggum decides that Laddie would make the perfect police dog. Bart gives him to the Springfield police force and is forced to explain why the family now has no dog at all, while sobbing. Homer instructs Bart to do whatever it takes to get Santa's Little Helper back and he goes hunting around the town, trying to find his old pal. Bart eventually learns from Reverend Lovejoy that the dog was given to a parishioner named Mr. Mitchell.
Bart visits Mr. Mitchell, who is blind and lonely, and asks for his dog back, but when he sees how the man and Santa's Little Helper have bonded, he grows heartsick and leaves. Still determined to get his dog back, Bart makes a late-night visit to Mr. Mitchell's home in hopes of retrieving Santa's Little Helper. The pair are reunited, but Bart traps himself in a closet. Mr. Mitchell calls the police and demands that Bart be charged with burglary, but Bart explains that Santa's Little Helper was his dog and that he wants him back. To solve the problem, Bart and Mitchell let Santa's Little Helper decide where he wants to go, with him choosing Bart. Chief Wiggum arrives with Laddie, who immediately sniffs out a bag of marijuana in Mr. Mitchell's pocket. Bart and Santa's Little Helper head home, leaving the police to "finish up" with Mitchell, as more officers arrive with women and beer.