Kevin realizes that the toy store the Sticky Bandits plan to hit at midnight is Duncan's Toy Chest and that all the money for the Children's Hospital will be stolen, so he decides to fashion an elaborate set of traps to foil Marv and Harry. Fortunately, his Uncle Rob and Aunt Georgette are out of town while their house is being renovated, so he has a whole arsenal of stuff at his disposal, e.g., paint, tar, varnish, jumper cables, fire extinguishers, bricks, paint rollers, wood, saws, rope, kerosene, etc. He uses these items to plan "Operation Ho Ho Ho", and then heads over to Duncans. First, he uses his Talkboy to photograph Marv and Harry while they are busy robbing the tills. Next, he tosses a rock through the store window, setting off the burglar alarm. Then he leads the bungling burglars to Uncle Rob's house where "Operation Ho Ho Ho" begins. Marv and Harry are catapulted, whacked by bricks, buried under cans of paint, electrocuted, blow-torched, knocked down flights of stairs, and chased by fire up a kerosene-soaked rope, never getting seriously injured, of course. Finally, Kevin calls 911 to report them and then leads them into Central Park. Unfortunately, he slips on some ice and hits his head. When he comes to, Marv and Harry are standing over him. When they are just about to shoot him, the bird lady (Brenda Fricker) tosses a bag of birdseed on the bandits, and immediately they are covered by hungry pigeons. Kevin then lights a string of firecrackers, leading the police right to them.
Meanwhile, the Miami police have located Kevin through the use of Peter's credit card, and the family has flown to New York City where they chew out the hotel concierge, Mr Hector (Tim Curry) for his failure to detain Kevin once he found out that the credit cards were stolen. While Peter goes to the police station, Kate grabs a cab and begins searching New York City for her lost son. They are finally reunited under the giant Christmas tree in Rockefeller Center. The next morning -- Christmas morning -- the family awakens to a huge array of presents, having been sent to their Plaza Hotel suite by Mr Duncan as thanks for Kevin capturing the Sticky Bandits. While the family is opening the presents, Kevin takes his two turtledoves into the park and gives one to the bird lady so that they will be friends forever. In the final scene, Peter gets the $967.43 bill for Kevin's two days of room service.