Looks fungal or bacterial. Easiest thing would be just to take it back and get a refund. Also I wouldn't have bought one growing in such a tiny, out of proportion pot anyway. If you have any independent garden centers in your area that offer indoor plants try looking there for better quality hibiscus plants.

Just curious, were the leaves like that when it was at the store or did it start doing that since Sunday???

Also, why did you suspect there might be overwatering? About how much water does it get when you water & how often you water? How many hours of sun does it get?

@Embothrium I was thinking probably save myself the headache and get myself a plant from an independent garden centre too. Thank you for your input!

@luis_pr the leaves were all green on Sunday. I gave it about 2 cups of water on Tuesday and it started to yellow right around the same time. I had read that overeating could cause leaves to yellow and drop and is why i thought maybe i over watered it. I waited for it to dry a bit at the top this time and just watered it again today. The plant is in front of a south facing window and gets about 7 hours of sun total, maybe 3 hours direct sun.

Only two cups of water? How big is the pot then? I usually had to water a gallon or so (but mine were not hibiscus trees).

For potted plants, you can check your watering results by tipping a few plants out of their pots after watering. If not enough water was absorbed by the rootball, you will see a definite line where the water penetrated to and stopped. The soil will be darker above the line where it is wet and lighter below the line where it is dry. When potted plants are watered correctly the entire root ball will appear dark and wet, with no visible line between wet and dry areas. What seems like enough water is usually not enough to soak the entire root ball. Try this until you are sure that the amount of water that you are applying is sufficient to wet the entire root zone.

I will definitely give that a try. Home Depot says I have 90 to return so I'll wait a few weeks to see if the condition changes.Thanks @luis_pr!