Back at the Psych office, Gus is continuing the nanny search in earnest and has narrowed it down to three candidates - all of which Shawn immediately dismisses with a glance. Shawn checks the pictures on his phone and sees that two of the houses have the same security company, Startek. When he gets to Startek, Lassiter and Juliet are already there. Lassiter suspects the guards of being in on the burglaries but Shawn realizes quickly they don't have the aptitude to pull of the heists. He see the addresses of the other houses hit, but when he calls Gus to pick him up to do recon, Gus refuses, saying they need to focus on Vick's nanny. Instead, Shawn is forced to get Henry to drive him around the neighborhood. Henry gets Shawn to see that the other houses in the area are actually easier targets than the ones that got hit. Those houses were chosen for a reason. Shawn then sees one of the nannies from the park coming out of the house next door with expensive sunglasses, possibly bought with money from outside her income. The nannies are somehow related to the robberies. He needs to investigate the Red Balloon Agency.
With Gus busy working on the case they were actually hired for, Shawn gets Juliet to go to the agency with him and pose as perspective clients. There they meet with Abby, who runs the agency, who tells them that Red Balloon installs Baby Bonding Cameras in their clients' homes so parents can check in with their nannies and children during the day, the control of those cameras resting solely with the parents. She shows them the video room and introduces them to Steve, the technician, who chews tobacco. While there, Juliet gets a call from Lassiter saying that he's found some of the stolen merchandise at a pet store fronting for a fence. When they get to the store, Shawn sees evidence of chew and has a "vision" that the person who sold the merchandise was Steve from Red Balloon. It's not the nannies who are behind the burglary ring. It's the agency. Of course, just then Gus calls to say he's finally found Vick the perfect nanny - from the Red Balloon agency.
Shawn and Gus go back to the agency to figure out exactly how they are pulling off the crimes. They find a hidden wall panel that moves back to reveal another set of feeds from the baby bonding cameras, and a joystick that controls the camera angles. Abby and Steve must be pointing the cameras at the neighbors' houses, getting security codes and times the they would be empty. On the monitor, they see Abby and Steve at Chief Vick's house and call Juliet to tell her and Lassiter to meet them over there. When they get there, Vick thanks them for her new nanny, who has finally gotten her daughter Iris to sleep. Which means, Shawn has to explain the case in a whisper, as not to wake her up. Vick now has to arrest Abby and Steve, but all is not lost. Her former nanny has decided to move back to town, allowing Vick to finally be able to get some sleep again.