SpongeBob and Gary are shopping at the Barg'N-Mart and SpongeBob sees a Kelpo cereal box that says there is a "free prize inside." SpongeBob then rushes home and eats the cereal, but sees that there is no toy inside the box. SpongeBob looks at the cereal box more closely and sees that it actually says "free prize offer inside" (the word "offer" is printed in very small text between "prize" and "inside") and that he must send in 99 box tops in order to get the prize. SpongeBob goes and buys even more boxes of cereal, and he and Gary begin going through it very quickly. When SpongeBob puts more cereal in Gary's food bowl, Gary suggests he send in the box tops before eating all the cereal. SpongeBob then puts all the box tops into an envelope and sends it.
Now, SpongeBob must wait patiently for the toy to arrive. Patrick also comes nearby and waits with him. Patrick asks what they are waiting for, and SpongeBob explains that he is getting a free toy. The mailfish comes by and gives SpongeBob three envelopes but no toy. SpongeBob and Patrick must wait even longer now, much to their disappointment, and soon become hungry. Patrick suggests that he and SpongeBob go to the Krusty Krab for a Krabby Patty, but SpongeBob is afraid of the mailman coming with the toy while he's gone. So Patrick instead goes to the Krusty Krab by himself.
Sometime later, Sandy walks by and starts to ask SpongeBob if he wants to do karate with her, but SpongeBob grabs Sandy by the arm and slams her into the ground before telling her in a very rude tone that he is busy. After that, Gary shows SpongeBob his bowl because he is hungry, causing his owner to angrily shout his frustration that no one understands that he is busy waiting for the mailman.
After calming down, Patrick comes back and SpongeBob lashes out at him for no reason. Patrick tells SpongeBob he missed his surprise birthday party at the Krusty Krab, so he had to bring back a present and some cake for him, making SpongeBob upset again. While trying to find the fork, Patrick accidentally eats SpongeBob's piece of cake, and the present, which SpongeBob is visibly excited about, turns out to be the fork that Patrick was trying to find earlier, which is now useless.
SpongeBob loses it and starts bawling about how he is wasting his whole life waiting for his toy, and how Patrick apparently hates him now because he is a "big jerk." Patrick says he doesn't hate him, but SpongeBob doesn't listen. The mailman arrives and asks for SpongeBob's signature. It takes a while after SpongeBob signs before he realizes that his toy has finally arrived! He and Patrick become so happy that they do a jig before falling over and dancing on the ground.
Upon opening it, they call the toy beautiful before Patrick pushes the button on the toy and springs come out. SpongeBob thinks Patrick "ruined" the toy and is furious. Patrick tries to fix it, but makes it worse. Squidward comes home to see them rolling around crying. He tries to play his clarinet, but can't because of all the noise. He asks what is wrong with them. SpongeBob explains to Squidward how he sent in box tops, waited for the mailman, and then how Patrick broke the toy. Squidward snatches the toy, fixes it, then shows him that the toy's head, arms, and legs are supposed to spring off, and reattaches them. SpongeBob and Patrick then hug Squidward, asking if there is anything they could for him, and Squidward replies that they should move to another neighborhood.
This is the second time SpongeBob expected to find a toy in his cereal box and was disappointed, the first being "Shanghaied." However, this one explains the lack of a toy in the box: the label says "Free prize offer inside," meaning that you need to send in box tops to actually get the toy.
The box saying "Free prize offer inside" is a parody of cereal boxes that frequently make that claim. Since one must actually send in several box tops (and shipping fees) to get the toy it is not actually "free" and "inside," one has to buy the cereal to get it and not actually inside. It should not say it should be inside if it's not really inside the box.