When Jerry leaves an upscale clothing store without making a purchase, he feels guilty and claims he will return with a friend to get their opinion of a jacket he does not like. The sales clerk Craig Stewart, who sports a long ponytail, looks skeptical. Jerry returns with Elaine just to prove Craig wrong. Craig flirts with Elaine in front of Jerry, making him feel emasculated. Moreover, Elaine strongly endorses the jacket, thereby pressuring Jerry into buying it. Craig promises Elaine a discount on a Nicole Miller dress, but claims it sold out immediately after and is being restocked.
George and Kramer begin parking at a discount parking lot. After picking up his car George discovers a condom inside and suspects prostitutes are servicing their clients inside the cars. The lot loses Kramer's keys, forcing him to use another customer's Mary Kay pink Cadillac Eldorado and sleep in Jerry's apartment. George questions the prostitutes hanging around. He offers one of them money for information, but is caught by Susan. Susan has no trouble believing him when he explains, to his frustration since he was hoping she might call off their wedding due to his seeming infidelity. The lot refuses to refund George's money, denying the prostitution allegations, and says George cannot reclaim his car for several days because it is parked in the back.
George and Susan have a houseguest, Susan's friend Ethan, who is the "Wig Master" for a production of Joseph and the Amazing Technicolor Dreamcoat. Ethan's co-worker, the show's costume designer, lends Kramer the technicolor dreamcoat. Wearing the coat, a woman's large hat blown off by the wind, and a silver-handled walking stick Elaine gave him after writing about it for the Peterman catalogue, Kramer goes to pick up the Cadillac. He finds a prostitute servicing a client in the car. When he ejects them, she starts attacking him over the fee he has cost her. Police arrive and assume Kramer to be a pimp due to his attire and fight with a prostitute, and arrest him.
Fuming about Craig's slight toward him, Jerry unsuccessfully attempts to return his jacket in order to deny Craig the sales commission. When Jerry is lunching with Ethan, a friend of Ethan's stops by and sets up a get-together with him; Jerry demands to know why he assumed he and Ethan were not together.
Jerry suspects Craig is just promising the discount on the dress in order to keep seeing Elaine. She does not believe it, especially when Craig promises the same discount to a male friend. When Elaine is over at Craig's apartment, his manager calls; she confirms from him that the dress has been in stock all along. In revenge, Elaine cuts off Craig's ponytail to sell for wig hair.