At the Krusty Krab, a guy dressed in a suit comes to the door. Mr. Krabs believes him to be a tax collector and panics, until the man shows his business card, which identifies him as an employee of "R.A. PennyPincher Vending Supplies". Mr. Krabs is overjoyed as the delivery men bring the claw vending machine that he ordered into the Krusty Krab. Mr. Krabs explains that it will "pay for itself in no time" and insists that SpongeBob and Squidward try it, giving them each a free quarter.
Squidward plays the machine, and almost picks up a stuffed snake and loses. He excitedly exclaims to SpongeBob that he "almost got that on his first try!" Mr. Krabs leaves saying to himself "My work here is done." When SpongeBob tries the machine, Squidward expects him to lose, but SpongeBob effortlessly wins a teddy bear, which he names "Beary." Squidward dismisses this as "beginner's luck," and tries the machine again, but loses. SpongeBob then returns to the machine and wins a friend for Beary. Squidward begins to pull out another quarter, but remembers Mr. Krabs' words "at a quarter a pop this thing pays for itself in no time," and tells himself that he won't fall for the scam.
Later on, SpongeBob continues to effortlessly win several more stuffed animals from the machine, and Squidward is no longer able to resist his urges. He gets change from Mr. Krabs, and spends all of his money on the machine without winning even once. When Squidward tells Mr. Krabs that he has no more money for him, Mr. Krabs announces that it is pay day and gives Squidward a large sack of coins. Squidward tells Krabs that he will stop playing if he doesn't win with his very next quarter, but ends up playing for six hours, expending his entire salary. As Squidward sits on the floor crying, SpongeBob plays the machine and gets two plush toys with one quarter. He says: "that's not fair" and puts one of them back in using the claw.
When Squidward goes home, he tries to watch TV to get his mind off the machine, but finds himself unable to pick up the remote. He tries to turn on the TV with one of his eyes, but it hurts. Then, he goes to bed, and can't pick up the blanket or glass of water. He soon finds that he can't pick up anything, and goes insane, proclaiming that he absolutely must win the crane. He puts back on his normal clothes, gets his piggy bank and runs to the Krusty Krab. The next morning, SpongeBob finds Squidward with his legs on the floor in front of the crane holding the joystick. Mr. Krabs then empties the machine and finds an enormous amount of Squidward's money, along with the deed to his house. SpongeBob tells Squidward the secret to winning (close your eyes and be the crane). Squidward does this, and wins a teddy bear with his last quarter. He becomes overjoyed, pronounces his victory over the intercom, and insults a little boy who has just lost at the machine.
At the end of the day, Squidward walks home with SpongeBob, and sees a construction site. He operates the unoccupied crane with his eyes closed and picks up a girder. He ends up destroying the brand new mall and loses control of the vehicle, backing up down a hill as SpongeBob and the construction workers run away. He crashes into the Krusty Krab, destroying it. Squidward then exits the crane and tries to leave, but the furious construction workers surround him. SpongeBob tries to pick up Squidward with the crane, but picks up the stuffed animal that Squidward won instead. SpongeBob says: "I guess I can only pick up toys" as the construction workers prepare to pummel Squidward.
It is shown that Squidward's deed to his house is in the money carton. This means Squidward sold his own house in order to get more money to win.
This is one of the few episodes where Mr. Krabs is shown paying SpongeBob and Squidward, and given the amount of quarters he gave Squidward, he apparently pays them a standard worker's salary, in contrast to numerous claims of them being underpaid in other episodes.
Running Gag: Squidward losing and SpongeBob winning at the skill crane.
Squidward's obsession with the crane and the way the crane kept calling his name is similar to the episode "The Fever" in "The Twilight Zone."
When Mr. Krabs walks away with Squidward deed to his house, Mr. Krabs puts it in his pants, but it disappears as he walks.
The quarters are gold in this episode not silver, in the other episodes they are regular silver.
At first, the Skill Crane says: "You Win" and then when SpongeBob wins the last time it says: "Winner."
There were only three construction workers running with SpongeBob back to the Krusty Krab, but when Squidward was about to leave, there were nine construction workers. Although, the shot probably didn't include all of the workers running with SpongeBob.
When SpongeBob shows Squidward the secret to winning the crane, the machine says "winner" however no prize comes out the machine slot.