Steve Mason, a veteran and drifter, is employed as a clerk during the Christmas season at Crowley's, a New York department store. He suspects customer Connie Ennis of being a comparative shopper for a rival store when she buys an expensive toy train set without asking a single question about it. That night, her son Timmy becomes excited when he sneaks a peek at what he thinks is his present, only to be disappointed when his mother sets him straight. When Connie returns the train the next day, Steve tells her of his suspicions and that he should report her to the store detective, which would lead to her firing. After she explains that she is a war widow with a son to support, Steve refunds her money, a gesture that costs him his job. Steve becomes acquainted with Connie, her son, and her longtime steady suitor, lawyer Carl Davis. On Christmas morning, Timmy discovers the train set outside the apartment door and assumes that his mother got it for him after all. When Connie realizes who it must have come from, she finds the almost-broke Steve in Central Park, gives him a tie, and offers to reimburse him for the expensive present. He refuses her money, saying that he wants to encourage Timmy's optimism. Connie then reveals she is marrying Carl on New Year's Day; Steve lets her know he thinks her decision is a mistake. Annoyed, Connie goes home. Later on, Steve is arrested on suspicion of theft of a pair of stolen sterling silversalt and pepper shakers, which a park bum had given to him as a gift. Carl does his best to secure his client's freedom, but only succeeds in annoying the police lieutenant. Connie explains about Steve and the bum, to the discomfort of Carl and the amusement of the lieutenant, and Steve is released, because her story corroborates in every detail the story Steve had already told the lieutenant. Timmy then invites Steve to have Christmas dinner with them. The meal is an uneasy affair, with Connie's former in-laws watching the two rivals for her affections. At the end, Steve stands up and announces that he is in love with Connie and that she should marry him. She tells him to leave. The next day, Timmy takes his train set back to Crowley's to get the money back for Steve because Timmy thinks Steve is somewhat destitute, and could use the money. One of the cars has gotten broken in the holiday rush-crush, and his request is refused. He eventually ends up tearfully telling his story to the store owner, Mr. Crowley. Mr Crowley takes the boy home, where Carl is on the phone to the police; reporting him missing. Timmy tells them what he did. Connie and Carl drive to Steve's hotel to give him the money. When Connie asks Carl to see Steve by himself, the lawyer realizes he has no chance and gives up. Connie then sees Steve, but when he insists that she stop grieving for her dead husband, she leaves. Later, as she prepares to go alone to a New Year's Eve party, Timmy expresses his concern that she is going alone, and that when he gets married and moves away she will be all alone. She finally stops denying to herself that she has loved Steve for a while. Steve has sent her a farewell telegram letting her know he is leaving that night for California, so she takes Timmy, boards the train Steve is taking, and embraces him.
